SOLUTION: Last year, Jen and Berry Inc. had sales of $50,000, cost of goods sold (COGS) of 12,000, depreciation charge of $3,000 and selling, general and administrative (SG&A) cost of $10,00

Question 1027494: Last year, Jen and Berry Inc. had sales of $50,000, cost of goods sold (COGS) of 12,000, depreciation charge of $3,000 and selling, general and administrative (SG&A) cost of $10,000. The interest costs were $2,500. Tewnty-five percent of SG&A costs are fixed costs. If its sales are expected to be $60,000 this year, what will be the estimated SG&A costs this year?
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
i would say the sg&a costs would be equal to 11,500.

10,000 this year.

25% is fixed, so fixed = 2,500 and 7,500 is variable, meaning it is dependent on sales.

assuming the fixed costs didn't change, then:

fixed costs = 2,500.

variable costs = 7,500 * 60,000 / 50,000 = 9,000.

total sg&a cost becomes 2,500 + 9,000 = 11,500.

that's my take.

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