Sunn Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During November, the company budgeted for 6,100 units, but its actual level of activity was 6,050 units. The company has provided the following data concerning the formulas to be used in its budgeting:

-The net operating income in the flexible budget for November would be closest to:
A) $16,494
B) $19,520
C) $18,760
D) $16,767

Question

Sunn Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During November, the company budgeted for 6,100 units, but its actual level of activity was 6,050 units. The company has provided the following data concerning the formulas to be used in its budgeting:
 
-The net operating income in the flexible budget for November would be closest to:
A) $16,494 
B) $19,520 
C) $18,760 
D) $16,767

Quizplus · Accepted Answer

11ea7761_1755_e6f0_81a5_4139288ad2c6_TB2580_00 Net operating income = ($15.20 × 6,050) − $73,200 = $18,760

Sunn Corporation Manufactures and Sells a Single Product