Davis Corporation manufactures and sells portable radios.The radio sells for $35 per unit and its variable costs per unit are $30.Fixed costs are $64,000 per month for sales volumes up to 32,000 radios.If more than 32,000 radios are sold,the fixed costs will be $83,000.The flexible budget would reflect what monthly operating income for a sales volume of 41,000 radios?

Question

Quizplus · Accepted Answer

B)
Output units 41,000
Revenue (# of units × selling price)41,000 × 35 =$1,435,000
Variable Costs (# of units × variable cost per unit)41,000 × 30 = $1,230,000
Fixed expenses $83,000
Total expenses 1,230,000 + 83,000 = $1,313,000
Operating income 1,435,000 - 1,313,000 = $122,000

Davis Corporation Manufactures and Sells Portable Radios