Krazy Kayaks Sells Its Entry-Level Kayaks for $750 Each

question 18

Multiple Choice

Krazy Kayaks sells its entry-level kayaks for $750 each. Its variable cost is $500 per kayak. Fixed costs are $25,000 per month for volumes up to 1100 kayaks. Above 1100 kayaks, monthly fixed costs are $60,000. What is the budgeted operating income at a level of 2500 kayaks per month?

• A)$625,000
• B)$1,815,000
• C)$565,000
• D)$600,000