Ibis Company Prepared the Following Static Budget for the Coming

question 48

Multiple Choice

Ibis Company prepared the following static budget for the coming month:
$\begin{array}{|l|l|r|}\hline \text { Static Budget } & & \\\hline \text { Units/volume } & & 12,000 \\\hline & \text { Per Unit } & \\\hline \text { Sales revenue } & \$ 20.00 & \$ 240,000 \\\hline \text { Variable expenses } & \$ 9.00 & 108,000 \\\hline \text { Contribution margin } & & 132,000 \\\hline \text { Fixed expenses } & & 130,000 \\\hline \text { Operating income/(1oss) } & & \$ 2,000 \\\hline\end{array}$
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If a flexible budget was prepared at a volume of 13,000 units, how much would the operating income be?

• A) $22,000
• B) $17,500
• C) $24,000
• D) $13,000

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Definitions:

Comparative Reasoning

Involves assessing similarities and differences among objects, situations, or ideas to reach a conclusion or make a decision.

Comparative Reasoning

A method of making decisions or understanding issues by comparing them to other similar situations.

Comparative Reasoning

A method of reasoning through the comparison of similar cases, instances, or scenarios to draw conclusions or make decisions.

Communal Well

A water well that is shared and used by the members of a community.