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3 March, 07:56

Based on a predicted level of production and sales of 23,800 units, a company anticipates total variable costs of $107,100, fixed costs of $31,800, and operating income of $82,440. Based on this information, the budgeted amount of sales for 21,800 units would be: a. $221,340. b. $202,740. c. $241,646. d. $127,228. $151,643.

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  1. 3 March, 08:15
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    b. $202,740

    Explanation:

    We know that,

    Operating income = Sales - total variable cost - fixed cost

    $82,440 = Sales - $107,100 - $31,800

    So, the sales would be

    = $82,440 + $107,100 + $31,800

    = $221,340

    Now the selling per unit would be

    = Sales : sales units

    = $221,340 : 23,800 units

    = $9.3 per unit

    For 21,800 units, the budgeted sales would be

    = 21,800 units * $9.3 per unit

    = $202,740
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