Speedy Bikes Couriers Company Prepared the Following Static Budget for the Year

question 105

Multiple Choice

Speedy Bikes Couriers Company prepared the following static budget for the year:

If a flexible budget is prepared at a volume of 8,700,calculate the amount of operating income.The production level is within the relevant range.

• A)$30,000
• B)$13,050
• C)$44,850
• D)$3,000

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Definitions:

Exercise Price

The predetermined price at which the holder of an option can buy (call option) or sell (put option) the underlying security or commodity.

Option

An option is a financial derivative that represents a contract sold by one party to another, offering the right, but not the obligation, to buy or sell a security at an agreed-upon price within a certain period of time.

Receive

To obtain or accept something given, presented, or transmitted to you.

Pay

The salary or wage that is given to an employee by an employer in exchange for their work.