Davis Corporation Manufactures and Sells Portable Radios

Multiple Choice

Davis Corporation manufactures and sells portable radios. The radio sells for $60 per unit and its variable costs per unit are $20. Fixed costs are $52,000 per month for sales volumes up to 30,000 radios. If more than 30,000 radios are sold, the fixed costs will be $40,000. The flexible budget would reflect what monthly operating income for a sales volume of 37,000 radios?

A) $40,000
B) $1,440,000
C) $2,220,000
D) $1,480,000