CHAPTER 6 QUIZ

1.

Dewitt Co. budgeted its activity for October 2004 from the following information:

Sales are budgeted at $750,000. All sales are credit sales and a provision for doubtful

accounts is made monthly at the rate of 2 percent of sales.

Merchandise inventory was $120,000 at September 30, 2004, and an increase of $10,000

is planned for the month.

All merchandise is marked up to sell at invoice cost plus 50 percent.

Estimated cash disbursements for selling and administrative expenses for the month are

$105,000.

Depreciation for the month is projected at $25,000.

Dewitt is projecting operating income for October 2004 in the amount of

a.

$105,000.

b.

$119,000.

c.

$129,000.

d.

$230,000.

how do you calculate the cost of good sold?