Outdoor Outfitters has created a flexible budget for the 70,000-unit and the 80,000-unit levels of activity...

50.1K

Verified Solution

Question

Accounting

Outdoor Outfitters has created a flexible budget for the70,000-unit and the 80,000-unit levels of activity shown asfollows. Complete Outdoor Outfitters's flexible budget at the105,000-unit level of activity. Assume that the cost of goods soldand variable operating expenses vary directly with sales and thatincome taxes remain at 30 percent of operating income.
70,000 Units
80,000 Units
105,000-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
$

Answer & Explanation Solved by verified expert

4.2 Ratings (791 Votes)

Units Workings 70000 80000 105000 a Sales Revenue 20 per unit X 105000 1400000 1600000 2100000 b Cost of goods sold 2100000 X 60 840000 960000 See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

	70,000 Units		80,000 Units		105,000-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	$