Sound Design Sells Its Computer Speakers for $115 Per Set

question 37

Multiple Choice

Sound Design sells its computer speakers for $115 per set.Its variable cost is $75 per set of speakers.Fixed costs are $80,000 per month for volumes up to 2,400 sets of speakers.Above 2,400 sets,monthly fixed costs are $115,000.What is the budgeted operating income (loss) at a sales level of 2,300 sets of speakers per month?

• A)Operating loss of $23,000
• B)Operating income of $92,000
• C)Operating income of $12,000
• D)Operating income of $184,500

---

Definitions:

Oval Window

A membrane-covered opening at the base of the stapes bone in the middle ear that transfers sound vibrations to the cochlea.

Basilar Membrane

A membrane in the cochlea of the inner ear that vibrates in response to sound and whose vibrations lead to activity in the auditory pathways of the brain.

Middle Ear

The part of the ear between the eardrum and the oval window that contains three small bones which transmit sound vibrations.

Dichromat

An individual with dichromacy, a form of color blindness where one has difficulty distinguishing certain colors due to the absence or malfunction of one of the three types of cone cells in the eyes.