Kevin Couriers Company prepared the following static budget for the year
Static Budget
Units/Volume 5,000
Per Unit
Sales Revenue $7.00 $35,000
Variable Costs 1.00 5,000
Contribution Margin 30,000
Fixed Costs 3,000
Operating Income/(Loss) $27,000
If a flexible budget is prepared at a volume of 7,800, calculate the amount of operating income. The production level is within the relevant range.
A) $43,800
B) $27,000
C) $7,800
D) $3,000
A .A)
Kevin Couriers Company
Flexible Budget
For the Year Ended December 31, 20XX
Budgeted
Amounts
Per Unit
Units 7,800
Sales Revenue $7.00 $54,600
Variable Costs 1.00 7,800
Contribution Margin 46,800
Fixed Costs 3,000
Operating Income $43,800
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