A Packaging Company Produces Cardboard Boxes in an Automated Process

question 135

Multiple Choice

A packaging company produces cardboard boxes in an automated process.The required direct materials costs $0.30 per unit.Fixed manufacturing overhead costs are budgeted at $24,000 per month and are allocated based on units of production.The budgeted contribution margin per unit is $0.85, and administration fixed costs are budgeted at $7,500 per month.What is the flexible-budget amount for operating income for 40,000 and 20,000 units, respectively?

• A)$26,000; $20,000
• B)$36,000; $30,000
• C)$40,000; $34,000
• D)$44,000; $38,000
• E)$2,500; <$14,500>

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Definitions:

Significantly Increased

A statistical term describing when an observed value or statistic shows a substantial and unlikely to occur by chance increase from a baseline or reference value.

Population of Differences

A hypothetical or actual collection of differences derived from comparing two sets or populations in a statistical study.

Average Fees

The mean cost or charge for services or admission to events.

Extended Office Visits

Longer-than-usual appointments with healthcare providers to address complex or multiple health concerns.