Based on a predicted level of production and sales of 12,000 units, a company anticipates reporting operating income of $26,000 after deducting variable costs of $72,000 and fixed costs of $10,000. Based on this information, the budgeted amounts of fixed and variable costs for 15,000 units would be:
A. $12,500 of fixed costs and $90,000 of variable costs.
B. $10,000 of fixed costs and $72,000 of variable costs.
C. $12,500 of fixed costs and $72,000 of variable costs.
D. $10,000 of fixed costs and $90,000 of variable costs.
E. $10,000 of fixed costs and $81,000 of variable costs.
Answer: D
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