Question

Outdoor Outfitters has created a flexible budget for the 70,000-unit and the 80,000-unit levels of activity shown as follows. Complete Outdoor Outfitters's flexible budget at the 105,000-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 105,000 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

Answer 1

DATE Solutions) Sales Price permet - $1,400,000 / 70,000 units - $ 20 Loo Sales a $20 X 105,000 unite 2 $2,100,000 unite Colt of goode sold = $8,40,000 / 70,000 units per unit (iii) 6; COGS = $12 x 1 05, 000 iness! ___ 2 $ 1,260,000 unite Gross Profit on Sales = sales - COGS - = $2100,000 - 1,260,00 - - $ 840,000 Vaulable Operating = ($3,70,000 - 2009) A expenses per mit 70000 units - $2,80,000 (70,000 lite ce Operaling expenses $90,000 +($4x1050 - $90,000 +4,20,000 CamScanner $5,19 000 Scarhed with

beras Income - Groce Projet operating expenses $ 8,90,00 - 5.10,000 - = $ 3, 30,000 Income Taxes = $3,300000 x 30% (30% of Oberaline bancome) - $ 3,30 1920 x 30 $ 99,000 Mo Not Income = operating Income-Income - . $ 330,000 – 99.000 X30 100 a taxel $ 2,31,000 its) - 70.000(mite) 80, coolemies 10 500 akan - sales $ 1.400,00 $1,600 ou 2,100,000 © cost of goode sold $8,40,000 $9,60,000 1,269,000 wi) Goudes pocogit.on $5,60,000 $6,40,000 890,000 - Sale in Oberating expenses $3.70,000 $4,10.000 5,10,000 + $ 900 fixed) M Obesiting the comme $190,000 - $2,30 000 330.000 vo frcome. Barer ( 3oto of 01) $57,000 $63, 000 99.000 dsca lleter Income $133.000 $461,000 231.000