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:

Equation

A mathematical statement that asserts the equality of two expressions, usually formulated as \(a = b\).

Exponential Equation

An equation in which the variable appears as an exponent.

Decimal Places

The number of digits to the right of the decimal point in a decimal number.

Logarithmic Equation

An equation involving logarithms, which represents the exponent to which the base of the logarithm must be raised to yield a given number.