Davis Corporation manufactures and sells portable radios. The radio sells for $70.00 per unit and its variable costs per unit are $30.00. Fixed costs are $51,000 per month for sales volumes up to 25,000 radios. If more than 25,000 radios are sold, the fixed costswill be $51,000 The flexible budget would reflect what monthly operating income for a sales volume of 39,000 radios?A. $1,560,000B $51,000C. $2,730,000D. $1,509,000

Question
Asked Dec 3, 2019
1 views
Davis Corporation manufactures and sells portable radios. The radio sells for $70.00 per unit and its variable costs per unit are $30.00. Fixed costs are $51,000 per month for sales volumes up to 25,000 radios. If more than 25,000 radios are sold, the fixed costs
will be $51,000 The flexible budget would reflect what monthly operating income for a sales volume of 39,000 radios?
A. $1,560,000
B $51,000
C. $2,730,000
D. $1,509,000
help_outline

Image Transcriptionclose

Davis Corporation manufactures and sells portable radios. The radio sells for $70.00 per unit and its variable costs per unit are $30.00. Fixed costs are $51,000 per month for sales volumes up to 25,000 radios. If more than 25,000 radios are sold, the fixed costs will be $51,000 The flexible budget would reflect what monthly operating income for a sales volume of 39,000 radios? A. $1,560,000 B $51,000 C. $2,730,000 D. $1,509,000

fullscreen
check_circle

Expert Answer

Step 1

Determine contribut...

Selling price per unit
Less: Variable cost per unit
Contribution margin per unit
$70
$30
$40
39,000
$1,560,000
Multiply: Number of radios sold
Total contribution margin
help_outline

Image Transcriptionclose

Selling price per unit Less: Variable cost per unit Contribution margin per unit $70 $30 $40 39,000 $1,560,000 Multiply: Number of radios sold Total contribution margin

fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Business

Accounting

Financial Accounting

Related Accounting Q&A

Find answers to questions asked by student like you

Show more Q&A add
question_answer

Q: Valuing Trading Securities at Fair Value On January 1, Valuation Allowance for Trading Investments h...

A: Adjusting entry: Adjusting entries are prepared after preparing the trial balance during the end of ...

question_answer

Q: Waterways puts much emphasis on cash flow when it plans for capital investments. The company chose i...

A: Internal rate of return formula.

question_answer

Q: Question 9 View Policies Current Attempt in Progress The following information was taken from Waterw...

A: Cash budget shows the expected cash inflows and cash outflows for a budgeted period. Cash budget als...

question_answer

Q: A business had revenues of $640,000 and operating expenses of $715,000. Did the business (a) incur a...

A: Net Income is the difference between revenue and expenses reported in an accounting period.Net Incom...

question_answer

Q: Analysis of Receivables Method At the end of the current year, Accounts Receivable has a balance of ...

A: Accounts receivable:Accounts receivable is the amount of cash owed to the company by the customer fo...

question_answer

Q: -/1 Question 12 View Policies Current Attempt in Progress If there were 60000 pounds of raw material...

A: Purchases for thw month can be computed by the following formulaPurchases=Closing stock+Required for...

question_answer

Q: T-ACCOUNTS FORMULAS/EQUATIONS Please provide the formula/equation to find the missing amount for the...

A: T-account: The condensed form of a ledger is referred to as T-account. The left-hand side of this ac...

question_answer

Q: Why are most large companies like Microsoft, PepsiCo, Caterpillar, and AutoZone organized as corpora...

A: Corporation: The form of business entity, which is incorporated by state law into a separate legal e...

question_answer

Q: What is the difference between adjusting entries and correcting entries?

A: The journal entries which are passed with the purpose of balancing the debits and credits at the end...