Dewitt Co. budgeted its activity for October 20XX 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, 20XX, 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 20XX in the amount of

a. $105,000. 

b. $119,000. 

c. $129,000. 

d. $230,000

Answer rating: 100% (QA)

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