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-BARSIC- [3]
2 years ago
13

A company's master budget for October is to manufacture and sell 30,000 units for a total sales revenue of $270,000, total varia

ble costs of $180,000, and total fixed costs of $24,000. The company actually manufactured and sold 32,000 units and generated $45,000 of operating income in October. The flexible-budget operating income in October was:
Business
1 answer:
Feliz [49]2 years ago
5 0

Answer:

$72,000

Explanation:

The Starting point for flexing a Budget  is to determine the Standard unit Selling Price and unit Cost Prices, then apply the amounts to the actual activity/production as shown below ;

<u>Flexible-budget for the month of October</u>

Sales ($270,000/30,000 x  32,000)                               $288,000

Less Variable Costs ($180,000/30,000 x  32,000)       ($192,000)

Contribution                                                                        $96,000

Less Fixed Costs                                                               ($24,000)

Operating Income                                                               $72,000

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