Based on a Predicted Level of Production and Sales of 12,000

Multiple Choice

Based on a predicted level of production and sales of 12,000 units, a company anticipates reporting operating income of $26,000 after deducting variable costs of $72,000 and fixed costs of $10,000. Based on this information, the budgeted amounts of fixed and variable costs for 15,000 units would be:

A) $10,000 of fixed costs and $72,000 of variable costs.
B) $10,000 of fixed costs and $90,000 of variable costs.
C) $12,500 of fixed costs and $90,000 of variable costs.
D) $12,500 of fixed costs and $72,000 of variable costs.
E) $10,000 of fixed costs and $81,000 of variable costs.