Speedy Bikes 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 1.50 7,500
Contribution Margin 27,500
Fixed Costs 4,000
Operating Income/(Loss) $23,500
If a flexible budget is prepared at a volume of 8,400, calculate the amount of operating income. The production level is within the relevant range.
A) $23,500
B) $12,600
C) $42,200
D) $4,000
C .C)
Speedy Bikes Couriers Company
Flexible Budget
For the Year Ended December 31, 20XX
Budgeted
Amounts
Per Unit
Units 8,400
Sales Revenue $7.00 $58,800
Variable Costs 1.50 12,600
Contribution Margin 46,200
Fixed Costs 4,000
Operating Income $42,200
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