In: Accounting
Bonita Sports sells volleyball kits that it purchases from a
sports equipment distributor. The following static budget based on
sales of 800 kits was prepared for the year. Fixed operating
expenses account for 32% of total operating expenses at this level
of sales.
Sales | $ | 40,000 | ||
Cost of goods sold (all variable) | 24,000 | |||
Gross margin | 16,000 | |||
Operating expenses | 14,000 | |||
Operating income | $ | 2,000 |
Assume that Bonita Sports actually sold 840 volleyball kits during
the year at a price of $49 per kit.
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