Southern Instruments makes calculators for business applications.The budgeted selling price is $120 per calculator,the variable rate is $98 per calculator and budgeted fixed costs are $150,000 per month.What is the budgeted operating income for 15,000 calculators sold in a month?
A)$330,000
B)$1,620,000
C)$1,800,000
D)$180,000

Question

Quizplus · Accepted Answer

D)
Revenue (# of units × selling price per unit)15,000 × 120 = $1,800,000
Variable Costs (# of units × variable cost per unit)15,000 × 98 = $1,470,000
Fixed costs $150,000
Total expenses 1,470,000 + 150,000 = $1,620,000
Operating income 1,800,000 - 1,620,000 = $180,000

Southern Instruments Makes Calculators for Business Applications