The net operating income (loss) in the flexible budget for October would be:
A) $(35,960)
B) $(2,145)
C) $2,240
D) $7,850

Question

Quizplus · Accepted Answer

We can calculate the flexible budget based on the actual number of units sold, which is 3,450.

Flexible Budget = $13,900 + ($18 × 3,450) - ($8 × 3,450) - $4,500 
Flexible Budget = $13,900 + $62,100 - $27,600 - $4,500 
Flexible Budget = $43,900

Net Operating Income (Loss) = Actual Results - Flexible Budget 
Net Operating Income (Loss) = $39,940 - $43,900 
Net Operating Income (Loss) = $(3,960)

Therefore, the correct answer is A) $(35,960)

The Net Operating Income (Loss) in the Flexible Budget for October