Comparative income statements for Boggs Sporting Equipment Company for the last two months are presented below:

\begin{array}{|l|r|r|}\hline & \text { July } & \text { August } \\\hline \text { Sales in Units } & 11,000 & 10,000 \\\hline \text { Sales Revenue } & \$ 165,000 & \$ 150,000 \\\hline \text { Less: Cost of Goods Sold } & \underline{72,600} & \underline{66,000} \\\hline \text { Gross Margin } & 92,400 & 84,000 \\\hline \text { Less: Operating Expenses: } & & \\\hline \text { Rent } & 12,000 & 12,000 \\\hline \text { Sales Commissions } & 13,200 & 12,000 \\\hline \text { Maintenance Expenses } & 13,500 & 13,000 \\\hline \text { Clerical Expenses } & \underline{16,000} & \underline{15,000} \\\hline \text { Total Operating Expenses } & \underline{\$ 54,700} & \underline{\$ 52,000} \\\hline \text { Operating Income } & \underline{\$ 37,700} & \underline{\$ 32,000} \\\hline\end{array}

All of the company's costs are either fixed, variable, or a mixture of the two (that is, mixed). Assume that the relevant range includes all of the activity levels mentioned in this problem.

-Which of the operating expenses of the company is variable?
A) Rent.
B) Sales commissions.
C) Maintenance expenses.
D) Clerical expenses.

In Describing the Cost Formula Equation Y = a

Multiple Choice

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