Infinity Clock Company Prepared the Following Static Budget for the Year

question 183

Multiple Choice

Infinity Clock Company prepared the following static budget for the year: $$\begin{array} { | l | l | r | } \hline \text { Static Budget } & & \\\hline \text { Units/Volume } & & 5000 \\\hline& & \\\hline& \text { Per Unit }\\\hline \text { Sales Revenue } & \$ 7.00 & \$ 35,000 \\\hline \text { Variable Costs }& 1.00 & \underline { 5000 } \\\hline\text { Contribution Margin } & & 30,000 \\\hline \text { Fixed Costs } && \underline { 3000 } \\\hline\text { Operating Income/(Loss) } & & \$27,000\\\hline\end{array}$$ If a flexible budget is prepared at a volume of 7800 units,calculate the amount of operating income.The production level is within the relevant range.

• A) $43,800
• B) $27,000
• C) $7800
• D) $3000

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