Answer the following questions using the information below:
Alex Furniture sells a table for $850. His fixed costs are $25,000, while his variable costs are $500 per table. He currently plans to sell 175 tables this month.
-What is the budgeted operating income for the month assuming that Alex sells 175 tables?
A) $45,250
B) $37,000
C) $36,250
D) $36,750

Question

Quizplus · Accepted Answer

To calculate the budgeted operating income, we first need to calculate the total revenue: 
Total revenue = Selling price x Quantity sold
Total revenue = $850 x 175 = $148,750
Next, we need to calculate the total costs:
Total cost = Fixed cost + Variable cost
Total cost = $25,000 + ($500 x 175) = $101,250
Finally, we can calculate the budgeted operating income:
Budgeted operating income = Total revenue - Total cost
Budgeted operating income = $148,750 - $101,250 = $36,500
Therefore, the answer is C.

Answer the Following Questions Using the Information Below