Answer the following questions using the information below:
Stosur Courtside Caterers is a small company that has hired you to perform some management advisory services.The following information pertains to 2018 operations.
$$\begin{array} { l r }
\text { Sales (5000 microwave ovens) } & \$ 1350000 \
\text { Cost of goods sold } & 540000 \
\text { Store manager's salary per year } & 75000 \
\text { Operating costs per year } & 225000 \
\text { Advertising and promotion per year } & 25000 \
\text { Commissions (4\% of sales) } & 67500
\end{array}$$
-What were total fixed costs for 2018?
A)$250 000
B)$225 000
C)$325 000
D)$932 500

Question

Answer the following questions using the information below:
Stosur Courtside Caterers is a small company that has hired you to perform some management advisory services.The following information pertains to 2018 operations.
 $$\begin{array} { l r } 
\text { Sales (5000 microwave ovens) } & \$ 1350000 \
\text { Cost of goods sold } & 540000 \
\text { Store manager's salary per year } & 75000 \
\text { Operating costs per year } & 225000 \
\text { Advertising and promotion per year } & 25000 \
\text { Commissions (4\% of sales) } & 67500
\end{array}$$
-What were total fixed costs for 2018?
A)$250 000
B)$225 000
C)$325 000
D)$932 500

Quizplus · Accepted Answer

Fixed costs are those that do not change with the level of production or sales. In this case, the fixed costs include the store manager's salary ($75,000), operating costs ($225,000), and advertising and promotion ($25,000). Adding these together gives a total of $325,000 in fixed costs for 2018. Commissions are variable costs since they change with sales, and cost of goods sold also varies with the number of units sold.

Answer the Following Questions Using the Information Below: Stosur Courtside

Answer the Following Questions Using the Information Below:
Stosur Courtside