Lawes Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During July, 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 to be used in its budgeting:

-The net operating income in the planning budget for July would be closest to:
A) $23,668
B) $16,200
C) $16,875
D) $24,144

Question

Lawes Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During July, 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 to be used in its budgeting:
 
-The net operating income in the planning budget for July would be closest to:
A) $23,668 
B) $16,200 
C) $16,875 
D) $24,144

Quizplus · Accepted Answer

11ea7761_175d_6138_81a5_fd5273b0f24b_TB2580_00 Net operating income = ($13.50 × 5,000) − $51,300 = $16,200

Lawes Corporation Manufactures and Sells a Single Product