Final answer:
The operating income for Apex Office Solutions at a volume level of 3,500 units is calculated using a flexible budget, by subtracting the total variable costs and total fixed costs from the total revenue. The correct operating income for this scenario is C. $100,625.
Step-by-step explanation:
The question pertains to the calculation of operating income for Apex Office Solutions using a flexible budget at a volume level of 3,500 units. To find the operating income, we must first calculate the total revenue, which is the selling price per unit times the number of units sold. Then we subtract the total variable costs and the total fixed costs from the revenue.
First, let's calculate the total revenue at a volume of 3,500 units.
Total Revenue = Selling Price per Unit x Quantity
Total Revenue = $72 x 3,500
Total Revenue = $252,000
Next, calculate the total variable costs.
Total Variable Costs = Variable Cost per Unit x Quantity
Total Variable Costs = $15.25 x 3,500
Total Variable Costs = $53,375
Now, since the volume level of 3,500 units does not exceed 4,500 units, we will consider the lower total fixed costs.
Total Fixed Costs = $98,000
Finally, we deduct the total variable costs and total fixed costs from the total revenue to find the operating income.
Operating Income = Total Revenue - Total Variable Costs - Total Fixed Costs
Operating Income = $252,000 - $53,375 - $98,000
Operating Income = $100,625
The correct option for the operating income at a volume level of 3,500 units is C. $100,625, found by using the appropriate flexible budget techniques.