Ruozzo Corporation Is a Service Company That Measures Its Output

question 61

Multiple Choice

Ruozzo Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for July. When the company prepared its planning budget at the beginning of July, it assumed that 27 customers would have been served. However, 22 customers were actually served during July.
The amount shown for net operating income in the planning budget for July would have been closest to:

• A) ($12,700)
• B) ($15,586)
• C) ($11,800)
• D) $3,700

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