USE THE FOLLOWING TO ANSWER QUESTIONS 4 AND 5: Princess Ariel sells two types of
ID: 2509463 • Letter: U
Question
USE THE FOLLOWING TO ANSWER QUESTIONS 4 AND 5:
Princess Ariel sells two types of beach towels, Standard and Deluxe. For the Standard towel, budgeted sales for the the year are $450,000, budgeted variable expenses are $360,000, and the budgeted contribution margin ratio is 20%. For the Deluxe towel, budgeted sales for the year are $50,000, budgeted variable expenses are $20,000, and the budgeted contribution margin ratio is 60%. Princess Ariel also budgets $57,600 in company-wide fixed expenses for the year.
4.) Princess Ariel's budgeted operating income for the year is:
a.) $62,400
b.) $120,000
c.) 32,400
d.) 4,800
5.) Princess Ariel's actual total sales for the year were $500,000; however, sales of Standard towels were $300,000 and sales of Deluxe towels were $200,000. Variable and fixed expenses were in line with the budget as presented in question 4 above. Princess Ariel's actual operating income for the year was:
a.) $120,000
b.) $74,800
c.) $62,400
d.) $122,400
Explanation / Answer
4a.$62,400.
4b.$122,400.
standard deluxe total sales $450,000 $50,000 $500,000 contribution (standard * 20%, deluxe *60%) $90,000 $30,000 $120,000 less: fixed cost $57,600 operating income $62,400Related Questions
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