Question

Question 1 Sheridan Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of 2,000 kits was prepared for the year. Fixed operating expenses account for 80% of total operating expenses at this level of sales. Sales Revenue Cost of goods sold (all variable) Gross margin Operating expenses Operating income $100,450 60,300 40,150 35,300 $ 4,850 Prepare a flexible budget based on sales of 1,430, 2,530, and 3,700 units. (Round unit values to 2 decimal places e.g. 15.25 and all other answers to O decimal places, e.g. 1525. If operating Income is negative, enter amounts using a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Unit 1,430 2,530 3,700 Click if you would like to show Work for this question: Open Show Work

Answer 1

	Unit	1430	2530	3700
Sales revenue	50.23	71829	127082	185851
Less: Variable expenses
Cost of goods sold	30.15	43115	76280	111555
Operating expenses	3.53	5048	8931	13061
Total Variable expenses	33.68	48163	85211	124616
Contribution margin	16.55	23666	41871	61235
Fixed expenses		28240	28240	28240
Operating income		-4574	13631	32995

Workings:
Unit:
Sales revenue	50.23	=100450/2000
Cost of goods sold	30.15	=60300/2000
Operating expenses	3.53	=(35300*20%)/2000
Fixed expenses	28240	=35300*80%