Question

A merchandising company's budget includes the following data for January: Sales: $400,000; COGS: $270,000; Administrative salaries: $1,250; Sales commissions: 5% of sales; Advertising: $10,000; Depreciation on store equipment: $25,000; Rent on administrative building: $30,000; Miscellaneous administrative expenses: $5,000. The total general and administrative expenses on the January general and administrative expense budget will be ___ $.

Answer 1

General and administrative expenses are calculated by adding together all administrative-related expenses. For the given merchandising company, the total general and administrative expenses for January are $91,250.

Step-by-step explanation:

To calculate the total general and administrative expenses for the January general and administrative expense budget for a merchandising company, we need to consider only the expenses that are general and administrative in nature. This includes administrative salaries, sales commissions (as they are part of selling expenses), advertising, depreciation on store equipment, rent on administrative building, and miscellaneous administrative expenses Calculating the total of these expenses, we have: Adding these figures together ($1,250 + $20,000 + $10,000 + $25,000 + $30,000 + $5,000), the total general and administrative expenses amount to $91,250.