A packaging company produces cardboard boxes in an automated process.The required direct materials costs $0.30 per unit.Fixed manufacturing overhead costs are budgeted at $24,000 per month and are allocated based on units of production.The budgeted contribution margin per unit is $0.85, and administration fixed costs are budgeted at $7,500 per month.What is the flexible-budget amount for operating income for 40,000 and 20,000 units, respectively? A)$26,000; $20,000 B)$36,000; $30,000 C)$40,000; $34,000 D)$44,000; $38,000 E)$2,500;

Question

A packaging company produces cardboard boxes in an automated process.The required direct materials costs $0.30 per unit.Fixed manufacturing overhead costs are budgeted at $24,000 per month and are allocated based on units of production.The budgeted contribution margin per unit is $0.85, and administration fixed costs are budgeted at $7,500 per month.What is the flexible-budget amount for operating income for 40,000 and 20,000 units, respectively?
A)$26,000; $20,000
B)$36,000; $30,000
C)$40,000; $34,000
D)$44,000; $38,000
E)$2,500; <$14,500>

Quizplus · Accepted Answer

The Answer of A packaging company produces cardboard boxes in an automated process.The required direct materials costs $0.30 per unit.Fixed manufacturing overhead costs are budgeted at $24,000 per month and are allocated based on units of production.The budgeted contribution margin per unit is $0.85, and administration fixed costs are budgeted at $7,500 per month.What is the flexible-budget amount for operating income for 40,000 and 20,000 units, respectively?
A)$26,000; $20,000
B)$36,000; $30,000
C)$40,000; $34,000
D)$44,000; $38,000
E)$2,500; <$14,500>

A Packaging Company Produces Cardboard Boxes in an Automated Process