Product A has a sales price of $10 per unit. Based on a 10,000-unit production level, the variable costs are $6 per unit and the fixed costs are $3 per unit. Using a flexible budget for 12,500 units, what is the budgeted operating income from Product A?
A. $12,500.
B. $30,000.
C. $25,000.
D. $20,000.
E. $35,000.
Answer: D
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