Saturday, June 25, 2011

Which cost estimation method is being used by Penny’s TV and Appliance Store?

ACCOUNTING

Multiple Choice

Penny’s TV and Appliance Store is a small company that has hired you to perform some management advisory services. The following information pertains to 20x3 operations.



Sales (2,000 televisions) $ 900,000

Cost of goods sold 400,000

Store manager's salary per year 70,000

Operating costs per year 157,000

Advertising and promotion per year 15,000

Commissions (4% of sales) 36,000


Which cost estimation method is being used by Penny’s TV and Appliance Store?

a. The industrial engineering method

b. The conference method

c. The account analysis method

d. The quantitative analysis method

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