Sound Design Sells Its Computer Speakers for $115 Per Set

question 164

Multiple Choice

Sound Design sells its computer speakers for $115 per set. Its variable cost is $70 per set of speakers. Fixed costs are $85,000 per month for volumes up to 2300 sets of speakers. Above 2300 sets, monthly fixed costs are $163,000. What is the budgeted operating income (loss) at a sales level of 2900 sets of speakers per month?

• A)Operating loss of $32,500
• B)Operating income of $130,500
• C)Operating income of $45,500
• D)Operating income of $170,500

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Definitions:

Psychotherapy

The treatment of mental disorder by psychological rather than medical means.

Neuroticism

A personality trait marked by emotional instability, anxiety, moodiness, worry, and fear.

Personality Trait

Enduring characteristics or qualities that describe an individual's consistent manner of behavior, feeling, and thought.

Predisposition

An inclination or tendency to behave in a particular way or to be affected by a particular condition.