Wohner Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During August, the company budgeted for 5,000 units, but its actual level of activity was 5,050 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for August:

Data used in budgeting:

Actual results for August:

-The net operating income in the planning budget for August would be closest to:
A)$19,836
B)$19,446
C)$26,700
D)$27,620

Question

Wohner Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During August, the company budgeted for 5,000 units, but its actual level of activity was 5,050 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for August:

Data used in budgeting:

Actual results for August:

-The net operating income in the planning budget for August would be closest to:

Data used in budgeting:

Actual results for August:

-The net operating income in the planning budget for August would be closest to:
A)$19,836 
B)$19,446 
C)$26,700 
D)$27,620

Quizplus · Accepted Answer

Net operating income = Total revenue - Total expenses
Total revenue = $150,000 + $60,000 = $210,000
Total expenses = $143,000 + $40,000 + $7000 = $190,000
Net operating income = $210,000 - $190,000 = $20,000
Therefore, the net operating income in the planning budget for August would be closest to $26,700, which is the only answer choice that is closest to $20,000.

Wohner Corporation Manufactures and Sells a Single Product