Ask Question
20 June, 11:28

Summer Nights sells bottles of bug spray for $ 9.00 each. Variable costs are $ 4.00 per bottle, while fixed costs are $ 40 comma 000 per month for volumes up to 40 comma 000 bottles of spray and $ 58 comma 000 per month for volumes above 40 comma 000 bottles of spray. The flexible budget would reflect monthly operating income for 23 comma 000 bottles of spray and 31 comma 000 bottles of spray of what dollar amounts?

+3
Answers (1)
  1. 20 June, 14:10
    0
    Operating Income $75,000 $115,000

    Explanation:

    The computation of the operating income reflected is shown below:

    Units 23,000 $31,000

    Contribution Margin per Unit $5 $5

    Contribution Margin (Units * Per Unit) $115,000 $155,000

    Less : Fixed Cost - $40,000 - $40,000

    Operating Income $75,000 $115,000

    The contribution margin per unit is come from

    = Selling price per unit - variable cost per unit

    = $9 - $4

    = $5
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Summer Nights sells bottles of bug spray for $ 9.00 each. Variable costs are $ 4.00 per bottle, while fixed costs are $ 40 comma 000 per ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers