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 are the estimated total costs if Stosur expects to sell 6500 units next year?
A)$932 500
B)$1 104 750
C)$665 000
D)$1 017 500

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 are the estimated total costs if Stosur expects to sell 6500 units next year?
A)$932 500
B)$1 104 750
C)$665 000
D)$1 017 500

Quizplus · Accepted Answer

The total costs include fixed costs (store manager's salary, operating costs, advertising and promotion) and variable costs (cost of goods sold and commissions). Fixed costs remain the same regardless of units sold, while variable costs change with sales volume. Calculate the variable costs for 6500 units and add the fixed costs to find the total estimated costs.

Answer the Following Questions Using the Information Below: Stosur Courtside

Answer the Following Questions Using the Information Below:
Stosur Courtside