Ibis Paper Company Prepared the Following Static Budget for November

question 138

Multiple Choice

Ibis Paper Company prepared the following static budget for November: $$\begin{array} { | l | c | r | } \hline \text { Static Budget } & & \\\hline \text { Units/Volume } & & 12,000 \\\hline& \text { Per Unit }\\\hline \text { Sales Revenue } & \$ 20.00 & \$ 240,000 \\\hline \text { Variable Costs } & 8.00 & \underline { 96,000 }\\\hline \text { Contribution Margin } &&144,000 \\\hline \text { Fixed Costs } & & 13,500 \\\hline \text { Operating Income/(Loss) } & & \underline { \$130,500 } \\\hline\end{array}$$ If a flexible budget is prepared at a volume of 13,500 units,calculate the operating income at 13,500 units of production.The production level is within the relevant range.

• A) $162,000
• B) $144,000
• C) $130,500
• D) $148,500

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Definitions:

Financial Reimbursement

The process of repaying or compensating healthcare providers for the services they have delivered to patients.

Incentive Spirometer

A device used to help patients improve the functioning of their lungs, especially after surgery or a lung illness.

Auscultation

The act of listening to the sounds made by the internal organs of the body, typically using a stethoscope, as part of a medical examination.

Pulse Oximetry

A non-invasive test that measures the oxygen saturation level of the blood, indicating how well oxygen is being sent to parts of the body furthest from the heart.