Based on a predicted level of production and sales of 23,800 units, a company anticipates total variable costs of $107,100, fixed costs of $31,800, and operating income of $82,440. Based on this information, the budgeted amount of sales for 21,800 units would be: a. $221,340. b. $202,740. c. $241,646. d. $127,228. $151,643.

Question

Business

Ayana Craig

17 September, 10:29

Based on a predicted level of production and sales of 23,800 units, a company anticipates total variable costs of $107,100, fixed costs of $31,800, and operating income of $82,440. Based on this information, the budgeted amount of sales for 21,800 units would be: a. $221,340. b. $202,740. c. $241,646. d. $127,228. $151,643.

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Answers (1)

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Angela Haynes · Answer 1

b. $202,740

Explanation:

We know that,

Operating income = Sales - total variable cost - fixed cost

$82,440 = Sales - $107,100 - $31,800

So, the sales would be

= $82,440 + $107,100 + $31,800

= $221,340

Now the selling per unit would be

= Sales : sales units

= $221,340 : 23,800 units

= $9.3 per unit

For 21,800 units, the budgeted sales would be

= 21,800 units * $9.3 per unit

= $202,740