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:

Brief Stories

Short narratives or anecdotes used to illustrate a point, entertain, or convey a message in a concise manner.

Dry Facts

Unembellished and straightforward information.

Solicited Letters

Letters that are requested or expected by the recipient, often involving inquiries, applications, or responses to queries.

Unsolicited Letters

Letters sent without a direct request, often for promotional or informational purposes.