Question

A company's flexible budget for 22,000 units of production showed per unit contribution margin of $3.50 and fixed costs, $38,600. The operating income expected if the company produces and sells 28,000 units is:

Answer 1

Answer:

$59,400

Explanation:

Operating income = Contribution - Fixed Costs

therefore,

At the activity of 28,000 units results will be :

Contribution (28,000 units x $3.50)   $98,000

Less Fixed Costs                                 ($38,600)    

Operating Income                                $59,400

Thus,

The operating income expected if the company produces and sells 28,000 units is $59,400