1 answer

For April, Zoe’s total selling, general, and administrative costs were $3,500,000. Total sales for the month were $10,000,000. Discuss whether

Question:

For April, Zoe’s total selling, general, and administrative costs were $3,500,000. Total sales for the
month were $10,000,000. Discuss whether the Crimson Tide sales price was sufficient, or not. What
factors could impact your response to this question?

This is all the information I got, not really sure how to answer it...


Answers

Monthly sales for Zoe is 10000000 which is more than the total selling general and administrative costs and is sufficient to cover all the selling and general,selling and administrative expenses. But Apart from selling general and administrative there are many other direct cost, like material cost, labor cost and variable manufacturing cost which forms the base of cost of production or cost of goods sold which is missing in the question. Apart from cost of goods sold, there are various operating cost like depreciation, fixed overheads etc. Many fixed financial charges are there like interest expense etc. So with out considering the cost of goods sold, operating cost and other financial charges we can not say that 10000000 is sufficient or not.

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