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:

Confounding Variable

A variable that is not controlled in a research investigation. In an experiment the experimental groups diĉer onboth the independent variable andthe confounding variable.

Internal Validity

Refers to how well an experiment is conducted and whether it measures what it's supposed to measure, without being confounded by other factors.

Independent Variable

A variable in an experiment that is manipulated to observe its effects on a dependent variable.

Internal Validity

The extent to which a study provides evidence that a causal relationship exists between the variables it examines, free from confounding factors.