Question

Krazy Kayaks sells its entryminus−level kayaks for $ 700.00$700.00 each. Its variable cost is $ 250.00$250.00...

Krazy Kayaks sells its

entryminus−level

kayaks for

$ 700.00$700.00

each. Its variable cost is

$ 250.00$250.00

per kayak. Fixed costs are

$ 21 comma 000$21,000

per month for volumes up to

2 comma 0002,000

kayaks. Above

2 comma 0002,000

​kayaks, monthly fixed costs are

$ 54 comma 000$54,000.

What is the budgeted operating income at a level of

700700

kayaks per​ month?

Homework Answers

Answer #1

Income Statement

Sales Revenue [700 x $700.00]

       490,000

Less: Variable Costs [700 x $250.00]

       175,000

Contribution Margin

       315,000

Less: Fixed Costs

         21,000

Net Operating Income

       294,000

“Hence, the budgeted operating income will be $294,000”

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