Ibis Paper Company Prepared the Following Static Budget for November

question 114

Multiple Choice

Ibis Paper Company prepared the following static budget for November: $$\begin{array} { | l | r | r | } \hline \text { Static Budget } & & \\\hline \text { Units/Volume } & & 12,000 \\\hline& \text { Per Unit } \\\hline \text { Sales Revenue } & \$ 21.00 & \$ 252,000 \\\hline \text { Variable Costs } &8.00 & \underline { 96,000 } \\\hline \text { Contribution Margin } && 156,000 \\\hline \text { Fixed Costs } & &\underline { 13,000 }\\\hline \text { Operating Income/(Loss) } & & \underline { 143,000 } \\\hline\end{array}$$ If a flexible budget is prepared at a volume of 13,300 units,calculate the operating income at 13,300 units of production.The production level is within the relevant range.

• A)$172,900
• B)$156,000
• C)$143,000
• D)$159,900

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Definitions:

Eroded

The process by which natural forces remove soils, rock, or dissolved material from one location and transport it to another, often leading to changes in landscape and topography.

Volcanic

Pertaining to the processes associated with the eruption and formation of volcanoes and their emitted materials.

Basalt

A dark, fine-grained volcanic rock that is formed from the rapid cooling of basaltic lava exposed at or very near the surface of a planet.

Sedimentary Terrain

Areas dominated by sedimentary rocks, which are formed from the accumulation and lithification of mineral and organic particles over time.