Bonkowski Corporation makes one product and has provided the following information to help prepare the master budget for the next four months of operations:

Budgeted selling price per unit	$ 97
Budgeted unit sales (all on credit):
January	10,000
February	12,000
March	13,300
April	15,200

Raw materials requirement per unit of output	4	pounds
Raw materials cost	$ 1.00	per pound
Direct labor requirement per unit of output	2.5	direct labor-hours
Direct labor wage rate	$ 23.00	per direct labor-hour
Predetermined overhead rate (all variable)	$ 9.00	per direct labor-hour
Variable selling and administrative expense	$ 3.10	per unit sold
Fixed selling and administrative expense	$ 70,000	per month

Credit sales are collected:

30% in the month of the sale

70% in the following month

Raw materials purchases are paid:

30% in the month of purchase

70% in the following month

The ending finished goods inventory should equal 30% of the following month's sales. The ending raw materials inventory should equal 10% of the following months raw materials production needs.

The estimated selling and administrative expense for February is closest to:

Multiple Choice

• $37,200

• $107,200

• $71,470

• $70,000

Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow:

• Sales are budgeted at $340,000 for November, $320,000 for December, and $310,000 for January.
• Collections are expected to be 80% in the month of sale and 20% in the month following the sale.
• The cost of goods sold is 75% of sales.
• The company would like to maintain ending merchandise inventories equal to 60% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase.
• Other monthly expenses to be paid in cash are $24,000.
• Monthly depreciation is $15,000.
• Ignore taxes.

Balance Sheet
October 31
Assets
Cash	$ 20,000
Accounts receivable	70,000
Merchandise inventory	153,000
Property, plant and equipment, net of $572,000 accumulated depreciation	1,094,000
Total assets	$ 1,337,000
Liabilities and Stockholders' Equity
Accounts payable	$ 254,000
Common stock	820,000
Retained earnings	263,000
Total liabilities and stockholders' equity	$ 1,337,000

The cost of December merchandise purchases would be:

Multiple Choice

• $235,500

• $240,000

• $139,500

• $255,000