Kevin Company Prepared the Following Static Budget for the Year

question 52

Multiple Choice

Kevin Company prepared the following static budget for the year 2015: $$\begin{array} { | l | c | r | } \hline \text { Static Budget } & & \\\hline \text { Units/volume } & & 5,000 \\\hline & \text { Per Unit } & \\\hline \text { Sales revenue } & \$ 3.00 & \$ 15,000 \\\hline \text { Variable expenses } & \$ 1.50 & 7,500 \\\hline \text { Contribution margin } & & 7,500 \\\hline \text { Fixed expenses } & & 4,000 \\\hline \text { Operating income/(loss) } & & \$ 3,500 \\\hline\end{array}$$ If a flexible budget was prepared at a volume of 7,000, calculate the amount of operating income.

• A) $3,500
• B) $10,500
• C) $6,500
• D) $4,000

---

Definitions:

Maslow Hierarchy

A psychological theory proposed by Abraham Maslow that outlines a five-tier model of human needs, from basic (physiological) to higher needs (self-actualization).

Lowest Level Need

Refers to the most basic or foundational requirements in a hierarchy of needs, typically associated with physiological or survival needs.

Personal Needs

Personal needs refer to the essential requirements necessary for an individual to achieve basic satisfaction, including physical, social, and psychological needs.

Need For Achievement

A psychological trait characterized by a strong desire to accomplish challenging tasks and meet high standards of success.