Question

A company's flexible budget for 19,000 units of production showed total contribution margin of $81,700 and fixed costs, $30,400. The operating income expected if the company produces and sells 24,000 units is:

a.) $72,000

b.) $90,600

c.) $8,900

d.) $51,300

e.) $18,381

Answer 1

The operating income will be $72.800

It seems like all the options are incorrect or the options belong to another question. I have provided answer for question given above.

	Flexible budget at 19000 units
Contribution margin per unit (81700/19000)	$               4.30

.

	Flexible budget at 24000 units
Contribution margin per unit (4.3 x 24000)	$ 103,200.00
Less: Fixed cost	$    30,400.00
Net operating income	$    72,800.00

Total fixed cost do not changes when units sold changes.