Answer the Following Questions Using the Information Below

question 76

Multiple Choice

Answer the following questions using the information below:
Alex Furniture sells a table for $850. His fixed costs are $25,000, while his variable costs are $500 per table. He currently plans to sell 175 tables this month.
-What is the budgeted operating income for the month assuming that Alex sells 175 tables?

• A) $45,250
• B) $37,000
• C) $36,250
• D) $36,750

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Definitions:

Transfer Price

The fee incurred for items or services shared among divisions or subsidiaries of the same business.

Relay Division

A segment or department within a company, possibly focused on conveying or transferring particular goods, services, or information, but the specific nature varies by context.

Electronics Division

A specialized department within a larger company focused on the development and production of electronic goods or components.

Variable Selling Expense

Costs that vary directly with the level of sales activity, such as commissions and shipping fees.