Exhibit 5-2
Manchester Company is a small company that has hired you to help them estimate costs.They present you with the following information from the company's most recent fiscal year.
Sales (2,000 units)$1,000,000
Cost of goods sold (24% of sales)240,000
Store supervisor's annual salary 65,000
Annual operating costs 70,000
Annual advertising and promotion 10,000
Sales commissions (5% of sales)50,000
-Refer to Exhibit 5-2.What were the total fixed costs for the company's most recent fiscal year?
A)$145,000
B)$135,000
C)$70,000
D)$195,000
E)None of the answer choices is correct.

Question

Quizplus · Accepted Answer

Fixed costs include the store supervisor's salary ($65,000), annual operating costs ($70,000), and annual advertising and promotion ($10,000), totaling $145,000.

Exhibit 5-2 Manchester Company Is a Small Company That Has Hired You