Question

Ibis Paper Company prepared the following static budget for November: Static budget Units/Volume 12,000 Per unit Sales revenue $21.00 $252,000 Variable costs 8.00 96,000 Contribution margin 156,000 Fixed costs 13,000 Operating income/(Loss) $143,000 If a flexible budget is prepared at a volume of 13,300 units, calculate the operating income at 13,300 units of production. The production level is within the relevant range.

Answer 1

Answer:

Net operating income= $159,900

Explanation:

Giving the following information:

Sales revenue= $21.00

Variable costs= $8.00

Fixed costs 13,000

For 13,300  units:

Sales= 21*13,300= 279,300

Total variable costs= 8*13,300= (106,400)

Total contribution margin= 172,900

Fixed costs= (13,000)

Net operating income= 159,900