Product a Has a Sales Price of $10 Per Unit

question 167

Multiple Choice

Product A has a sales price of $10 per unit. Based on a 10,000-unit production level, the variable costs are $6 per unit and the fixed costs are $3 per unit. Using a flexible budget for 12,500 units, what is the budgeted operating income from Product A?

• A) $12,500.
• B) $25,000.
• C) $20,000.
• D) $30,000.
• E) $35,000.

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