TNR Corporation Is Preparing Its Budgeted Income Statement for the Month

question 97

Multiple Choice

TNR Corporation is preparing its budgeted income statement for the month of August. Budgeted sales are $18,000. Cost of goods sold is twice the amount of operating costs, and operating costs plus cost of goods sold equals 40% of net income. Return on sales (net income / sales) is anticipated to be 50%. TNR does not have any nonoperating items on its income statement.
TNR's budgeted operating income will be:

• A) $9,000
• B) $15,600
• C) $14,400
• D) None of the above

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Definitions:

Modularizing

The process of breaking down a system into smaller, independent modules that can be developed, tested, and deployed separately.

External Product Development

The process of creating new products or making improvements with the aid of external partners or resources.

Enhancements

Improvements or upgrades made to products, services, or systems to increase functionality or performance.

Alliances

Cooperative agreements that allow firms to remain independent, but cooperatively pursue strategies consistent with their individual missions.