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The Stacy Company makes and sells a single product, Product R. Budgeted sales for April are $300,000. Gross margin is budgeted at 30% of sales dollars. If the net income for April is budgeted at $40,000, what are the budgeted selling and administrative expenses?
Remember:
1) Sales - Cost of Goods Sold = Gross Margin
2) Gross Margin - Selling & Administrative Expenses = Net Income
You don't need to calculate Cost of Goods Sold, but you do need to calculate the amount of gross margin in DOLLARS (the question gives it to you as a percentage of sales).
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