The Year 1 selling expense budget for Pear Corporation is as follows:
Budgeted sales | $220,000 |
Selling costs: | |
Delivery expenses | $2,200 |
Commission expenses | 4,400 |
Advertising expenses | 2,000 |
Office expenses | 1,200 |
Miscellaneous expenses | 4,240 |
Total | $14,040 |
Delivery and commission expenses vary proportionally with budgeted sales in dollars. Advertising and office expenses are fixed. Miscellaneous expenses include $1,600 of fixed costs. The rest varies with budgeted sales in dollars. The budgeted sales for Year 2 are $264,000.
What will be the value of miscellaneous expenses in the Year 2 selling expense budget?
Select one:
a. $5,088
b. $4,768
c. $2,880
d. $1,920