Christi Manufacturing provided the following information for last month: If sales double next month, what is the projected operating income?
A)$4,000
B)$7,000
C)$9,000
D)$12,000
E)$6,000

Question

Christi Manufacturing provided the following information for last month:  If sales double next month, what is the projected operating income?
A)$4,000 
B)$7,000 
C)$9,000 
D)$12,000 
E)$6,000

Quizplus · Accepted Answer

To calculate projected operating income, we need to first calculate the current operating income, which is:
Revenue - Variable Costs - Fixed Costs = Operating Income

Using the provided information, we can calculate the current operating income as follows:
$23,000 - ($10 * 1,300) - $2,700 = $7,000

If sales double next month, revenue would be $46,000 (i.e., $23,000 * 2). Using this information, we can calculate the projected operating income as follows:
$46,000 - ($10 * 2,600) - $2,700 = $9,000

Therefore, the answer is C, and the projected operating income would be $9,000 if sales double next month.

Christi Manufacturing Provided the Following Information for Last Month