Trevorrow Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 6,200 units, but its actual level of activity was 6,160 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June: Data used in budgeting:
Actual results for June:
The net operating income in the flexible budget for June would be closest to:
A) $20,696
B) $30,279
C) $30,674
D) $21,220

Question

Trevorrow Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 6,200 units, but its actual level of activity was 6,160 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June: Data used in budgeting:
 Actual results for June:
 The net operating income in the flexible budget for June would be closest to:
A) $20,696 
B) $30,279 
C) $30,674 
D) $21,220

Quizplus · Accepted Answer

11eacbfc_c598_96a9_8ffe_fb6114a53b68_TB7552_00 Net operating income = ($13.10 × 6,160) − $60,000 = $20,696

Trevorrow Corporation Manufactures and Sells a Single Product