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Managerial Accounting

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Moderate

Calculating a Budget

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If a static budget was prepared assuming a level of activity (i.e., producing and selling 100,000 units), then the organization can use the following cost data to prepare the budget. The retail selling price for each unit is \$25 per unit with a variable cost per unit of \$17. Fixed costs for the year were \$500,000.

What is the budgeted net operating income?

A

$800,000

B

$900,000

C

$1,700,000

D

$300,000