Ibis Paper Company Prepared the Following Static Budget for November

question 71

Multiple Choice

Ibis Paper Company prepared the following static budget for November: $$\begin{array} { | l | c | r | } \hline \textbf { Static Budget } & & \\\hline \text { Units/Volume } & & 12,000 \\\hline & \text { Per Unit } & \\\hline \text { Sales Revenue } & \$ 21,00 & \$ 252,000 \\\hline \text { Variable Costs } & 8.00 & \underline { 96,000 } \\\hline \text { Contribution Margin } & & 156,000 \\\hline \text { Fixed Costs } & & \underline { 13,500 } \\\hline \text { Operating Income/(Loss) } & & \underline{\underline{\$ 142,500}} \\\hline\end{array}$$ If a flexible budget is prepared at a volume of 14,500 units,calculate the operating income.The production level is within the relevant range.

• A)$188,500
• B)$156,000
• C)$142,500
• D)$175,000

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