Sound Design Sells Its Computer Speakers for $115 Per Set

Multiple Choice

Sound Design sells its computer speakers for $115 per set. Its variable cost is $70 per set of speakers. Fixed costs are $85,000 per month for volumes up to 2300 sets of speakers. Above 2300 sets, monthly fixed costs are $163,000. What is the budgeted operating income (loss) at a sales level of 2900 sets of speakers per month?

A) Operating loss of $32,500
B) Operating income of $130,500
C) Operating income of $45,500
D) Operating income of $170,500