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Myer Appliances Sells Its Microwave Ovens for $110 Each

Question 8

Multiple Choice

Myer Appliances sells its microwave ovens for $110 each. Its variable cost is $65 per microwave oven. Fixed costs are $90,000 per month for volumes up to 2,000 microwave ovens. Above 2,000 microwave ovens, monthly fixed costs are $135,000.
-What is the Myer Appliances' budgeted operating income (loss) at a sales level of 1,900 microwave ovens per month?


A) Operating loss of $4,500
B) Operating loss of $49,500
C) Operating income of $85,500
D) Operating income of $119,000

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