Speedy Runner makes running shoes and they are anticipating the incurrence of the following operating expenses during the upcoming year: Cost Sales commission $ 2 per pair of shoes sold Salaries $ 540 comma 000 Shipping expenses $ 5.00 per pair of shoes sold Bad debt expense 1.5% of sales revenue Depreciation on sales vehicles $ 28 comma 000 Advertising $ 20 comma 500 Speedy Runner plans to sell 127 comma 000 pairs of shoes at $100 per pair. What will Speedy Runner budget for cash disbursements related to operating expenses?

The correct answer is $1,449,500.

Explanation:

According to the scenario, the computation of the given data are as follows:

Sales commission = $2 per pair

So, total Sales commission = $2 × total number of pairs = $2 × 127,000

= $254,000

Now, Shipping expense = $5 per pair

So, Total shipping expense = $5 × total number of pairs = $5 × 127,000

= $635,000

So, we can calculate the Budget for cash disbursements by using following formula:

Cash disbursement budget = Total sales commission + Salaries + Total shipping expenses + Advertising

By putting the value, we get

Cash disbursement budget = $254,000 + $540,000 + $635,000 + $20,500

= $1,449,500

Answer and Explanation:

It is very significant for the managers to develop an important relationship in the value chain activities as it develop a positive impact on the company also it improves the employees morale.

The better the communication is, the better is the quality of the goods at the lowest cost

In the case of the inbound logistics and the suppliers, it would lead to decrease in the cost of inventory and at the same time it improve the quality of the products

Also when the customers have interacted with the manufacturing company so it would build trust and in return the company wants the loyal customers that ultimately increased the goodwill of the company