Ibis Company Prepared the Following Static Budget for the Month

question 136

Multiple Choice

Ibis Company prepared the following static budget for the month of November, 2015: $\begin{array}{|l|l|l|}\hline\text { Static Budget } & & \\\hline \text { Units/volume } & & 12,000 \\\hline & \text { Per Unit } & \\\hline \text { Sales revenue } & \$ 20 & \$ 240,000 \\\hline \text { Variable expenses } & \underline{\$ 8} & \underline{-96,000} \\\hline \text { Contribution margin } & & 144,000 \\\hline \text { Fixed expenses } & & \underline{-130,000}\\\hline \text { Operating income/(loss) } &&\$ 14,000 \\\hline\end{array}$ If a flexible budget was prepared at a volume of 13,000 units, calculate the operating income at 13,000 units of production.

• A) $22,000
• B) $17,500
• C) $14,000
• D) $26,000

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