Supreme Catering
At the end of January, Supreme Catering prepared the following budget for the upcoming month of February estimating that they would serve 3000 people:
$\begin{array}{lr}
\text { Sales revenue per guest } &\$20\
\text { Variable costs per guest} &8\
\text { Total fixed costs } &\$5000\
\end{array}$

During February, there were 2700 guests actually served. Actual costs incurred were $27 000 for variable costs and $6500 for fixed costs. Each guest was charged $20.
-Supreme Catering's flexible budget for February would show net income of:

Question

Supreme Catering
At the end of January, Supreme Catering prepared the following budget for the upcoming month of February estimating that they would serve 3000 people:
$\begin{array}{lr}
  \text { Sales revenue per guest } &\$20\
 \text {  Variable costs per guest} &8\
 \text { Total fixed costs } &\$5000\
\end{array}$

During February, there were 2700 guests actually served. Actual costs incurred were $27 000 for variable costs and $6500 for fixed costs. Each guest was charged $20.
-Supreme Catering's flexible budget for February would show net income of:

Quizplus · Accepted Answer

Since the question does not provide any information regarding the actual results or variance, we can assume that the flexible budget (which is based on actual activity) is the best estimate for net income. From the information provided, we can see that the flexible budget amounts to $256,500 in revenue and $229,100 in expenses, resulting in a net income of $27,400 (which is calculated by subtracting expenses from revenue). Therefore, the best choice is C) $27,400.

Supreme Catering at the End of January, Supreme Catering Prepared

Supreme Catering
at the End of January, Supreme Catering Prepared