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Question: a packaging company produces cardboard boxes in an automated process...

Question details

A packaging company produces cardboard boxes in an automated process. The required direct materials costs $0.30 per unit. Fixed manufacturing overhead costs are budgeted at $24,000 per month and are allocated based on units of production. The budgeted contribution margin per unit is $0.85, and administration fixed costs are budgeted at $7,500 per month.

Question: What is the flexible budget amount for operating income for 40,000 and 20,000 units, respectively?

a) $2,500; $1,250

b) $44,000; $22,000

c) $36,000; $30,000

d) $44,000; $38,000

e) $2,500; <$14,500>

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