Sund Corporation bases its budgets on the activity measure \"customers served\".

Question

Sund Corporation bases its budgets on the activity measure "customers served". During April, the company plans to serve 38,000 customers. The company has provided the following data concerning the formulas it uses in its budgeting:

                                                         Fixed element per month         Valiable element per month

Revenue                                                          ---                                   $2.10

Wages & Salaries                                      $25,000                                $0.50

Supplies                                                          $0                                    $0.30

Insurance                                                    $6,200                                 $0.00

Miscellaneous Expense                              $2,500                                 $0.40

Prepare the company's planning budget for April. What is the net operating income?

Explanation / Answer

Company's Planning budget for April

Element per month Fixed element per month $ Variable element per month on 38000 serves $ Total for April $ Total Revenue $38000 * 2.10 $79800 Expenses: Wages & Salaries $25000 38000 * 0.50 44000 Supplies - 38000 * 0.30 11400 Insurance 6200 - 6200 Miscellaneous Expense 2500 38000 * 0.40 17700 Total Cost 79300 Net Operating Income Total Revenue - Total Cost $500

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.