Kern Company Prepared the Following Tentative Budget for Next Year

question 69

Multiple Choice

Kern Company prepared the following tentative budget for next year:
The sales manager argues that the unit selling price could be increased by 20%,with an expected volume decrease of only 10%.If Kern incorporates these changes in its budget,what should be the budgeted operating income?

• A) $66,000.
• B) $90,000.
• C) $120,000.
• D) $145,000.Budgeted operating income = 90,000 * $3 - 150,000 = $120,000.

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Definitions:

Population Growth

An increase in the number of individuals in a population, typically measured over a specific period of time.

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