Ibis Company Prepared the Following Static Budget for the Coming

question 131

Multiple Choice

Ibis Company prepared the following static budget for the coming month:
$\begin{array}{|l|l|r|}\hline \text { Static Budget } & & \\\hline \text { Units/volume } & & 12,000 \\\hline & \text { Per Unit } & \\\hline \text { Sales revenue } & \$ 20.00 & \$ 240,000 \\\hline \text { Variable expenses } & \$ 9.00 & 108,000 \\\hline \text { Contribution margin } & & 132,000 \\\hline \text { Fixed expenses } & & 130,000 \\\hline \text { Operating income/(1oss) } & & \$ 2,000 \\\hline\end{array}$
-
If a flexible budget was prepared at a volume of 14,000 units, how much would the operating income be?

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

---

Definitions:

Overall Economy

The general condition of a country’s or region's economic system, considering factors like growth, employment, and inflation.

New Competitor

A business or organization that enters an industry and begins competing with existing entities for market share.

Cultural Values

The deeply rooted ideals or principles shared by members of a society that shape behaviors, norms, and social practices.

LMX

Leader-Member Exchange Theory, focusing on the two-way (dyadic) relationship between leaders and members, influencing organizational outcomes.