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What alpha would project operating income for december

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Reference no: EM132568788

Alpha Company budgets its activities for December 2008 based on the following information:

  • Forecast sales are budgeted at $900,000. All sales are made on credit and a provision for bad debt is made monthly at the rate of 2% of sales.
  • Merchandise inventory was $200,000 at November 30, 2008, and the ending inventory is planned to be reduced to $100,000 as at December 31, 2008 - All merchandise selling prices are marked up at invoice cost plus 60%.
  • Estimated selling and administrative expenses for the month are $100,000.
  • Budgeted monthly amortization expense is $50,000.

Question 1: Alpha would project operating income for December 2008 in the amount of:

a $119,000. b. $129,000. c. $169,500 d. $230,000.

Reference no: EM132568788

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