Speedy Bikes Couriers Company prepared the following static budget for the year
Static Budget
Units/Volume 5,000
Per Unit
Sales Revenue $7.00 $35,000
Variable Costs 1.50 7,500
Contribution Margin 27,500
Fixed Costs 4,000
Operating Income/(Loss) $23,500
If a flexible budget is prepared at a volume of 8,400, calculate the amount of operating income. The production level is within the relevant range.
A) $23,500
B) $12,600
C) $42,200
D) $4,000
C .C)
Speedy Bikes Couriers Company
Flexible Budget
For the Year Ended December 31, 20XX
Budgeted
Amounts
Per Unit
Units 8,400
Sales Revenue $7.00 $58,800
Variable Costs 1.50 12,600
Contribution Margin 46,200
Fixed Costs 4,000
Operating Income $42,200
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Answer the following statements true (T) or false (F)
1. The budgeted multi-step income statements of both manufacturing and merchandising companies include the calculation of gross profit. 2. Use of advanced technology makes it more cost effective for managers to conduct sensitivity analysis. 3. Sensitivity analysis is a what-if technique. 4. Budgeting software is often designed as a component of the company's Enterprise Resource Planning (ERP) system.
Value refers to a product meeting the highest number of a customer's needs at the lowest possible cost
Indicate whether the statement is true or false
The VRIN characteristics stand for:
a. Valuable, Real, Imitable, Non-substitutable b. Valuable, Rare, Industrial, Non-substitutable c. Valuable, Real, Independent, Non-substitutable d. Valuable, Rare, Imperfectly imitable, Non-substitutable
"Normal retirement age" in a private pension plan is
A) set at age 65 by federal statute. B) set at age 70 by federal statute. C) the age at which the average individual will retire. D) the age at which unreduced pension benefits are first available.