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    Flexible Budget

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    The flexible budget at the 70,000-unit and the 80,000-unit levels of activity is shown below.

    70,000 Units 80,000 Units 90,000 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 $

    Complete the flexible budget at the 90,000-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.

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    https://brainmass.com/business/business-math/flexible-budget-226823

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    The flexible budget at the 70,000-unit and the 80,000-unit levels of activity is shown below.

    70,000 Units 80,000 Units 90,000 Units

    Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,400,000 $1,600,000 $
    Cost of goods sold . . . . . . . . . . . . . . . . . . . . 840,000 960,000 $
    Gross profit on sales . . . . . . . . . . ...

    Solution Summary

    This solution is comprised of a detailed explanation to complete the flexible budget at the 90,000-unit level of activity.

    $2.19

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