Answer:
Expected level of operating income = $133,000
Explanation:
given data
flexible budget = 10,000 units
sales = $200,000
variable costs = $40,000
fixed costs = $75,000
solution
we get here Contribution margin for 10000 units that is express as
Contribution margin = sales - Variable cost ..............1
put here value and we get
Contribution margin = $200,000 - $40,000
Contribution margin = $160,000
and
now we get here Contribution margin expected for 13000 units that is
Contribution margin expected = $160,000 ÷ 10000 × 13000
Contribution margin expected = $208,000
so here Expected level of operating income
Expected level of operating income = Contribution Margin - Fixed costs
Expected level of operating income = $208,000 - $75,000
Expected level of operating income = $133,000
