A company's flexible budget for 12,000 units of production showed per unit contribution margin of $3.00 and fixed costs, $20,000. The operating income expected if the company produces and sells 18,000 units is:

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The operating income is calculated as follows:Operating income = (Selling price per unit - Variable cost per unit) * Number of units sold - Fixed costsIn this case, the selling price per unit is not given, but the contribution margin per unit is given as $3.00. The contribution margin is the difference between the selling price per unit and the variable cost per unit. Therefore, the selling price per unit is $3.00 + Variable cost per unit.The variable cost per unit is not given, but it can be calculated as follows:Variable cost per unit = Fixed costs / Number of units soldIn this case, the fixed costs are $20,000 and the number of units sold is 18,000. Therefore, the variable cost per unit is $20,000 / 18,000 = $1.11.Therefore, the selling price per unit is $3.00 + $1.11 = $4.11.The operating income is then calculated as follows:Operating income = ($4.11 - $1.11) * 18,000 - $20,000 = $34,000

A Company's Flexible Budget for 12,000 Units of Production Showed