Sound Design Sells Its Computer Speakers for $135 Per Set

question 96

Multiple Choice

Sound Design sells its computer speakers for $135 per set. Its variable cost is $85 per set of speakers. Fixed costs are $85,000 per month for volumes up to 2600 sets of speakers. Above 2600 sets, monthly fixed costs are $126,000. What is the budgeted operating income (loss) at a sales level of 2200 sets of speakers per month?

• A)Operating loss of $16,000
• B)Operating income of $110,000
• C)Operating income of $25,000
• D)Operating income of $212,000

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Definitions:

Agile Development

A software development methodology based on iterative progress, where requirements and solutions evolve through collaborative effort of self-organizing cross-functional teams.

Rapid Application Development

A software development approach focused on quick prototyping, iterative delivery, and less emphasis on planning and more on adaptive processes.

Prototyping

The process of creating a preliminary model of a product to test and validate its design and functionality before final production.

IT Architecture

The structural design of information technology systems, including hardware, software, networks, and processes, to support organizational goals.