Bee company is a honey wholesaler. an income statement and other data for the second quarter of the year are given below: bee company income statement for the quarter ended june 30 sales $ 960,000 cost of goods sold 420,000 gross margin 540,000 selling and administrative expenses: selling $ 200,000 administrative 75,000 275,000 net operating income $ 265,000 other data: average selling price $60 per unit selling expenses fixed selling expenses plus 8% of sales administrative expense fixed administrative expenses plus $2 per unit bee company's cost formula for total selling and administrative expenses, with "x" equal to the number of units sold would be: multiple choice y = $123,200 + $4.80x y = $123,200 + $6.80x y = $275,000 + $4.80x y = $166,200 + $6.80x

selling and administrative cost formula:

Y = $166,200 + $6.80X

Explanation:

First we solve for the units sold during hte period:

sales: 960,000

unit selling price: 60

units sold: 960,000 / 60 = 16,000

Then we calcualte the variable cost of both, selling and administrative:

selling variable 8% of selling 8% of $60 = 4.8

administrative $ 2

total variable: 6.8

Now we solve for fixed cost:

275,000 = 6.8 (16,000) + fixed

fixed = 275,000 - 108,800 = 166,200

the answer is "b.the increased supply will create a surplus. "

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