Product
A has a sales price of $16.0 per unit. Based on a 22,000-unit
production level, the variable costs are $9.00 per unit and the fixed
costs are $6.00 per unit. Using a flexible budget for 24,500 units, what
is the budgeted operating income from Product A?
| $132,000 | |
| $137,000 | |
| $49,000 | |
| $24,500 | |
 | $39,500 |
| Sales = 24,500($16.0) = $392,000 |
| Variable costs = 24,500($9.00) = $220,500 |
| Total costs = $220,500 (variable) + ($6.00 x 22,000) = $352,500 |
| Budgeted operating income = $392,000 (sales) - $352,500 (total costs) = $39,500 |
