The budgeted net income for December is:

Question

Quizplus · Accepted Answer

To calculate the budgeted net income for December, we need to subtract the total budgeted expenses from the total budgeted revenues.

Total budgeted revenues for December = $240,000 + $180,000 + $120,000 = $540,000
Total budgeted expenses for December = $200,000 + $80,000 + $120,000 + $77,500 = $477,500 (Note that the variable manufacturing overhead is a cost of goods sold rather than an expense.)

Budgeted net income for December = Total budgeted revenues - Total budgeted expenses
= $540,000 - $477,500
= $62,500

Therefore, the correct answer is A) $42,500.

The Budgeted Net Income for December Is