Windsor Limited Makes and Sells a Single Product -Suppose the Company Produces and Sells 25,000 Units Instead of Employs

question 83

Multiple Choice

Windsor Limited makes and sells a single product. The company employs a flexible budgeting system that covers a relevant range from 20,000 units to 25,000 units and a just in time inventory system. Budget data for April, based on 22,000 units, are as follows:
$\begin{array} { | l | r | } \hline \text { Prime costs } & \$ 30 \text { per unit } \\\hline \text { Manufacturing overhead } & \$ 132,000 \text { plus } \$ 3 \text { per unit } \\\hline \text { Selling and administrative expenses } & \$ 30,000 \text { plus } \$ 2 \text { per unit } \\\hline \text { Selling price } & \$ 60 \text { per unit } \\\hline\end{array}$

-Suppose the company produces and sells 25,000 units instead of the original 22,000 units at an average selling price of $55.What is the company's flexible budget operating income (loss) for April,given the actual sales volume of 25,000 units?

• A) $388,000.
• B) $463,000.
• C) $550,000.
• D) $625,000.

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Anne Hutchinson

A Puritan spiritual adviser in the Massachusetts Bay Colony who was banished for her beliefs, which challenged the established Puritan clergy.

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