Pickrel Corporation Is an Oil Well Service Company That Measures

Multiple Choice

Pickrel Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. When the company prepared its planning budget at the beginning of November, it assumed that 27 wells would have been serviced. However, 31 wells were actually serviced during November.The amount shown for net operating income in the planning budget for November would have been closest to:

A) $26,000
B) $9,100
C) $23,500
D) $22,645