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Sorter Company Has Provided the Following Data for the Third

Question 66

Multiple Choice

Sorter Company has provided the following data for the third quarter of the most recent year:
 Sales $500,000 Fixed Manufacturing Overhead 55,000 Direct Labour 72,500 Fixed Selling Expenses 46,250 Variable Manufacturing Overhead 41,000 Variable Administrative Expenses 48,000 Direct Materials 51,500 Fixed Administrative Expenses 44,500 Variable Selling Expenses 49,750\begin{array}{|l|r|}\hline \text { Sales } & \$ 500,000 \\\hline \text { Fixed Manufacturing Overhead } & 55,000 \\\hline \text { Direct Labour } & 72,500 \\\hline \text { Fixed Selling Expenses } & 46,250 \\\hline \text { Variable Manufacturing Overhead } & 41,000 \\\hline \text { Variable Administrative Expenses } & 48,000 \\\hline \text { Direct Materials } & 51,500 \\\hline \text { Fixed Administrative Expenses } & 44,500 \\\hline \text { Variable Selling Expenses } & 49,750\\\hline \end{array} Assume that direct labour is a variable cost and that there was no beginning or ending inventories.



-At the level of sales for the third quarter,how much in additional fixed selling expenses could Sorter Company have afforded to spend and still would have reported $41,500 operating income?


A) $50,000.
B) $87,750.
C) $91,500.
D) $96,250.

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