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Atwood Dairy Bar Sells Its Famous Soft-Serve Ice Cream Cones

Question 201

Multiple Choice

Atwood Dairy Bar sells its famous soft-serve ice cream cones near a marina and resort area.The owner,Theresa,wants to determine the cost behavior patterns to help planning for the next summer season.She has the following information available about the operating costs and the number of soft-serve cones served.  Month  Number of soft-serve canes  Total operating costs  April 8,200$5,200 May 8,600$5,500 June 7,500$4,500 July 9,700$6,000 August 8,900$5,900 September 5,700$5,000\begin{array} { | l | c | c | } \hline \text { Month } & \text { Number of soft-serve canes } & \text { Total operating costs } \\\hline \text { April } & 8,200 & \$ 5,200 \\\hline \text { May } & 8,600 & \$ 5,500 \\\hline \text { June } & 7,500 & \$ 4,500 \\\hline \text { July } & 9,700 & \$ 6,000 \\\hline \text { August } & 8,900 & \$ 5,900 \\\hline \text { September } & 5,700 & \$ 5,000 \\\hline\end{array} Theresa uses the high-low method to determine the operating cost equation and sells 8,000 cones in a month for $2.00 each.
-What would the operating income be if she prepared a contribution margin income statement for that month?


A) $14,000
B) $ 2,000
C) $16,000
D) $10,425

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