Final answer:
To calculate Proton Company's total selling expenses for August, the fixed salaries and commissions for all sales representatives must be combined. The total salary is $120,000, and the total commission is $30,000, leading to a sum of $150,000 in selling expenses.
Step-by-step explanation:
The question asks for the computation of total selling expenses for Proton Company, specifically for its sales representatives in the month of August, when each representative sold 5 refrigerators. The calculation involves two components: the fixed salary portion and the commission portion which is a percentage of sales.
Firstly, each sales representative earns a fixed salary of $20,000 per month. With 6 sales representatives, the total fixed salary expense for the month is $20,000 multiplied by 6, equating to $120,000.
Secondly, the commission expense is calculated on the sale of refrigerators. Each sales representative sells 5 refrigerators priced at $10,000 each, and earns a 10 percent commission on these sales. Thus, each representative earns a commission of $10,000 multiplied by 5 refrigerators multiplied by 10 percent, which amounts to $5,000. For 6 representatives, the total commission is $5,000 multiplied by 6, leading to $30,000.
Combining both salary and commission expenses, the total selling expenses for the month of August are $120,000 plus $30,000, equaling $150,000.