Simpson Company makes and sells a single product. Budgeted sales for April are $1,150,000. Gross margin is budgeted at 30% of sales. If the net income for April is budgeted at $155,000, budgeted selling and administrative expenses must be:

Budgeted selling and administrative expenses must be $190,000.

Explanation:

Budgeted selling and administrative expenses can be calculated as follows:

Budgeted gross margin = Budgeted sales * Percentage of budgeted sales that is budgeted gross margin = $1,150,000 * 30% = $345,000

Budgeted net income = Budgeted gross margin - Budgeted selling and administrative expenses …………. (1)

Substituting the relevant values into equation (1) and solve for budgeted selling and administrative expenses, we have:

$155,000 = $345,000 - Budgeted selling and administrative expenses

Budgeted selling and administrative expenses = $345,000 - $155,000 = $190,000

Therefore, budgeted selling and administrative expenses must be $190,000.

explanation: doctrine of respondeat superior is a legal doctrine that is commonly used in tort. this principle makes an employer or principal legally responsible for the wrongful acts done by an employee or agent, if such acts occur within the scope of the employment or agency.