Outdoor Outfitters has created a flexible budget for the 70,000 unit and the 80,000 unit levels of activity as shown below. Complete Outdoor Outfitters’s flexible budget at the 87,300 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. (Omit the “$” sign in your response.)
| 70,000 Units | 80,000 Units | 87,300 units | |||||
| Sales | $ | 1,400,000 | $ | 1,600,000 | $ | ||
| Cost of goods sold | 840,000 | 960,000 | |||||
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| Gross profit on sales | $ | 560,000 | $ | 640,000 | $ | ||
| Operating expenses ($90,000 fixed) | 370,000 | 410,000 | |||||
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| Operating income | $ | 190,000 | $ | 230,000 | $ | ||
| Income taxes (30% of operating income) | 57,000 | 69,000 | |||||
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| Net income | $ | 133,000 | $ | 161,000 | $ | ||
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