63.0k views
5 votes
A company's flexible budget for 14,000 units of production showed total contribution margin of $42,000 and fixed costs, $40,000. The operating income expected if the company produces and sells 26,000 units is:

User Cameel
by
7.5k points

1 Answer

6 votes

Answer:

$2,000 is the expected operating income.

Explanation:

Given:

The company's flexible budget = 14000 units.

Total contribution margin = $42,000.

Fixed costs = $40,000.

The company produces and sells 26,000 units.

Now, to find the operating income expected:

So, to get the operating income we deduct the fixed costs from the total contribution margin:


Total\ contribution\ margin-Fixed\ costs\\\\=\$42,000-\$40,000\\\\=\$2,000.

Therefore, $2,000 is the expected operating income.

User Gaurang Tandon
by
8.2k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories