What is the company flexible budget operating income

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Children Toys Limited makes and sells a single product. The company employs a flexible budgeting system that covers a relevant range from 25,000 units to 30,000 units and a just in time inventory system. Budget data for April, based on 27,000 units, are as follows:

Prime costs $35 per unit

Manufacturing overhead $137,000 plus $4 per unit

Selling and administrative expenses$35,000 plus $3 per unit

Selling price$75 per unit

Problem 1: Suppose the company produces and sells 29,000 units instead of the original 27,000 units at an average selling price of $70. What is the company's flexible budget operating income (loss) for April, given the actual sales volume of 29,000 units?

A) $640,000.

B) $463,000.

C) $550,000.

D) $388,000.

Reference no: EM132610145

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