Solution-Cost of goods sold and variable operating expenses

Cost of goods sold and variable operating expenses

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Reference no: EM13546543

Outdoor Outfitters has created a flexible budget for the 70,000-unit and the 80,000-unit levels of activity as shown below. Complete Outdoor Outfitters's flexible budget at the 87,300-unit level of activity. Assume that the cost of goods sold and variable operating expenses vary directly with sales and that income taxes remain at 30 percent of operating income.

	70,000 Units		80,000 Units		87,300-units
Sales	$	1,400,000	$	1,600,000	$
Cost of goods sold		840,000		960,000

Gross profit on sales	$	560,000	$	640,000	$
Operating expenses ($90,000 fixed)		370,000		410,000

Operating income	$	190,000	$	230,000	$
Income taxes (30% of operating income)		57,000		69,000

Net income	$	133,000	$	161,000	$

Reference no: EM13546543

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Cost of goods sold and variable operating expenses

Reference no: EM13546543

Reference no: EM13546543

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