Outdoor Outfitters has created a flexible budget for the 70,000-unit and the 80,000-unit levels of activity shown as follows. Complete Outdoor Outfitters's flexible budget at the 107,000-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 107,000 Units Sales $ 1,400,000 $ 840,000 1,600,000 Cost of goods sold 960,000 Gross profit on sales 2$ 560,000 $ 640,000 Operating expenses ($90,000 fixed) Operating income Income taxes (30% of operating income) 370,000 410,000 230,000 190,000 S 57,000 69,000 Net income 133,000 $ 161,000

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Outdoor Outfitters has created a flexible budget for the 70,000-unit and the 80,000-unit levels of activity shown as follows. Complete
Outdoor Outfitters's flexible budget at the 107,000-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
107,000 Units
$ 1,400,000 $ 1,600,000
960,000
Sales
Ask
Cost of goods sold
840,000
Gross profit on sales
2$
560,000 $
640,000
Operating expenses ($90,000 fixed)
370,000
190,000 $
410,000
Operating income
Income taxes (30% of operating income)
230,000
57,000
69,000
Net income
133,000 $
161,000
Mc
Graw
Hill
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Transcribed Image Text:R4 Assignment Saved Outdoor Outfitters has created a flexible budget for the 70,000-unit and the 80,000-unit levels of activity shown as follows. Complete Outdoor Outfitters's flexible budget at the 107,000-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 107,000 Units $ 1,400,000 $ 1,600,000 960,000 Sales Ask Cost of goods sold 840,000 Gross profit on sales 2$ 560,000 $ 640,000 Operating expenses ($90,000 fixed) 370,000 190,000 $ 410,000 Operating income Income taxes (30% of operating income) 230,000 57,000 69,000 Net income 133,000 $ 161,000 Mc Graw Hill < Prev 5 of 20 Next >
Which of the following is not a benefit of a careful and thorough budgeting process?
Multiple Choice
Ask
The budget may provide advance warning of pending problems.
Budgeted net Income assures the company of operating profitably.
Budgets provlde a yardstick for evaluating future performance.
Budgeting Increases management's awareness of the company's external economic environment.
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Transcribed Image Text:Which of the following is not a benefit of a careful and thorough budgeting process? Multiple Choice Ask The budget may provide advance warning of pending problems. Budgeted net Income assures the company of operating profitably. Budgets provlde a yardstick for evaluating future performance. Budgeting Increases management's awareness of the company's external economic environment. < Prev 7 of 20 aw
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