In September, Larson Inc. sold 40,000 units of its only product for $240,000, and incurred a total cost of $225,000, of which $25,000 was fixed costs. The flexible budget for September showed total sales of $300,000. Among variances of the period were: total variable cost flexible-budget variance, $8,000U; total flexible-budget variance, $63,000U; and, sales volume variance, in terms of contribution margin, $27,000U.

The amount of operating income in the flexible budget (FB) for September, to the nearest dollar, was:
A) $40,000.
B) $48,000.
C) $56,000.
D) $70,000.
E) $78,000.

Question

In September, Larson Inc. sold 40,000 units of its only product for $240,000, and incurred a total cost of $225,000, of which $25,000 was fixed costs. The flexible budget for September showed total sales of $300,000. Among variances of the period were: total variable cost flexible-budget variance, $8,000U; total flexible-budget variance, $63,000U; and, sales volume variance, in terms of contribution margin, $27,000U.

The amount of operating income in the flexible budget (FB) for September, to the nearest dollar, was:

The amount of operating income in the flexible budget (FB) for September, to the nearest dollar, was:
A) $40,000.
B) $48,000.
C) $56,000.
D) $70,000.
E) $78,000.

Quizplus · Accepted Answer

The Answer of In September, Larson Inc. sold 40,000 units of its only product for $240,000, and incurred a total cost of $225,000, of which $25,000 was fixed costs. The flexible budget for September showed total sales of $300,000. Among variances of the period were: total variable cost flexible-budget variance, $8,000U; total flexible-budget variance, $63,000U; and, sales volume variance, in terms of contribution margin, $27,000U.

The amount of operating income in the flexible budget (FB) for September, to the nearest dollar, was:
A) $40,000.
B) $48,000.
C) $56,000.
D) $70,000.
E) $78,000.