Complete Dillon Corp.’s flexible budget for 75,000 units using the information l
ID: 2447555 • Letter: C
Question
Complete Dillon Corp.’s flexible budget for 75,000 units using the information listed below:
25,000 Units
50,000 Units
75,000 Units
Sales
$375,000
$750,000
Cost of Goods Sold
$250,000
$500,000
Gross Profit on Sales
$125,000
$250,000
Operating expenses ($10,000 of it is fixed)
$35,000
$60,000
Operating Income
$90,000
$190,000
Income Taxes (30% of operating income)
$27,000
$57,000
Net Income
$63,000
$133,000
Assume that cost of goods sold and any variable operating expenses vary directly with sales and that income taxes remain constant at 30%.
25,000 Units
50,000 Units
75,000 Units
Sales
$375,000
$750,000
Cost of Goods Sold
$250,000
$500,000
Gross Profit on Sales
$125,000
$250,000
Operating expenses ($10,000 of it is fixed)
$35,000
$60,000
Operating Income
$90,000
$190,000
Income Taxes (30% of operating income)
$27,000
$57,000
Net Income
$63,000
$133,000
Explanation / Answer
Complete Dillon Corp.’s flexible budget for 75,000 units using the information listed below: 25,000 Units 50,000 Units 75,000 Units Sales $375,000 $750,000 1125000 Cost of Goods Sold $250,000 $500,000 750000 Gross Profit on Sales $125,000 $250,000 375000 Operating expenses ($10,000 of it is fixed) $35,000 $60,000 85000 Operating Income $90,000 $190,000 290000 Income Taxes (30% of operating Income) $27,000 $57,000 87000 Net Income $63,000 $133,000 203000 25000 50000 Sales Per Unit 15 15 COGS Per Unit 10 10 Operating Variable Expenses 1 1 Variable Expenses Per Unit will be the same Irrespective of No. of Units Produced Operating Expenses Variable Expenses for 75000 units 75000 Fixed Expenses 10000 Total 85000
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