Outdoor Outfitters has created a flexible budget for the 70,000-unit and the 80,000-unit levels of activity as shown below. Complete Outdoor Outfitters's flexible budget at the 87,300-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.
|
70,000 Units |
|
80,000 Units |
|
87,300-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 |
|
$ |
|
|
|
|
|
|
|
|