Question

Zhang Industries sells a product for $700. Unit sales for May were 400 and each month's sales are expected to exceed the prior month's results by 3%. Zhang pays a sales manager a monthly salary of $3,000 and a commission of 2% of sales. Compute the projected selling expense to be reported on the selling expense budget for the manager for month ended June 30.

a) $8,600.
b) $11,652.
c) $8,652.
d) $5,768.
e) $8,768.

Answer 1

Total selling expense= $8,768

Step-by-step explanation:

Giving the following information:

Selling price= $700

Sales for June in units= 400*1.03= 412

Fixed selling expense= $3,000

Sales commission= 2%

We need to calculate the total commission sales:

Total sales revenue= 700*412= $288,400

Total commission= 0.02*288,400

Total commission= 5,768

Now, the total selling expense:

Total selling expense= 5,768 + 3,000

Total selling expense= $8,768