Poulsen 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 7,300 units, but its actual level of activity was 7,270 units. The company has provided the following data concerning the formulas to be used in its budgeting:
-The net operating income in the flexible budget for July would be closest to:
A) $9,234
B) $9,310
C) $19,262
D) $19,580

Question

Poulsen 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 7,300 units, but its actual level of activity was 7,270 units. The company has provided the following data concerning the formulas to be used in its budgeting: 
-The net operating income in the flexible budget for July would be closest to:
A) $9,234 
B) $9,310 
C) $19,262 
D) $19,580

Quizplus · Accepted Answer

The net operating income in the flexible budget is calculated based on the expected revenues and expenses for the actual level of activity. The choice closest to the calculated net operating income for July is $19,262.

Poulsen Corporation Manufactures and Sells a Single Product