Question

Brodrick Company expects to produce 20,000 units for the year ending December 31. A flexible budget for 20,000 units of production reflects sales of $400,000; variable costs of $80,000; and fixed costs of $150,000. If the company instead produces and sells 26,000 units for the year, calculate the expected level of income from operations.

Answer 1

Answer:

For 20,000 units, we have 170,000

For 26,000 units, we have 266,000

Explanation:

Here, we are to calculate the expected level of income from operations.

Formulas that can come in handy from the table are;

Variable amount per unit = sales/number of units

contribution margin = Sales - Variable cost

Income from operations = Contribution margin - fixed cost

Please, kindly checked attached image for tabulated result calculations.