Warshaw Company Budgets Payroll at $4000 Per Month Plus a Percentage

Warshaw Company budgets payroll at $4000 per month plus a percentage of monthly sales. The June operating expenses budget includes total payroll of $10,400 with budgeted sales of $160,000. Sales for July are budgeted at $110,000 while purchases of inventory for July are budgeted at $60,000. Depreciation and insurance for July are estimated at $1200 and $700, respectively. Office and administrative expenses related to purchasing inventory are budgeted at 15% of purchases for the month. The purchase of $2000 in equipment and $1700 in furniture is expected in July. The total operating expenses budgeted for July are

A) $17,400
B) $12,300
C) $19,300
D) $8400

Correct Answer:

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