A Company's Master Budget for October Is to Manufacture and Sell

question 118

Multiple Choice

A company's master budget for October is to manufacture and sell 30,000 units, for a total sales revenue of $270,000, total variable costs of $180,000, and total fixed costs of $24,000. The company actually manufactured and sold 32,000 units, and generated $45,000 of operating income in October.

The flexible-budget operating income in October, to the nearest dollar, was:

• A) $27,000.
• B) $70,400.
• C) $72,000.
• D) $83,520.
• E) $86,400.

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Definitions:

Hersey-Blanchard

A situational leadership model proposing that effective leadership is dependent on the task readiness of the followers.

High-Readiness

The state of being fully prepared and able to respond quickly and effectively to changes or opportunities.

Telling Style

A communication approach where information is explicitly stated or instructed without the need for feedback from the listener.

Low-Readiness

Describes a situation or condition in which individuals or groups are not adequately prepared or equipped to undertake certain tasks or responsibilities.