Reflector Glass Company Prepared the Following Static Budget for the Year

question 185

Multiple Choice

Reflector Glass Company prepared the following static budget for the year: $\begin{array}{|l|l|r|}\hline \text { Static Budget } & & \\\hline \text { Units/Volume } & & 5000 \\\hline & \text { Per Unit } & \\\hline \text { Sales Revenue } & \$ 7,00 & \$ 35,000 \\\hline \text { Variable Costs } & 1.50 & \underline{7500} \\\hline \text { Contribution Margin } & & 27,500 \\\hline \text { Fixed Costs } & & \underline{4000} \\\hline \text { Operating Income/(Loss) } & & \underline{\$ 23,500} \\\hline\end{array}$ If a flexible budget is prepared at a volume of 8400 units,calculate the amount of operating income.The production level is within the relevant range.

• A) $23,500
• B) $12,600
• C) $42,200
• D) $4000

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