Office Plus sells its main product, ergonomic mouse pads, for $8 each. Its variable cost is $2 per pad. Fixed costs are $200,000 per month for volumes up to 80,000 pads. Above 80,000 pads, monthly fixed costs are $265,000.
Requirement
Prepare a monthly flexible budget for the product, showing sales revenue, variable costs, fixed costs, and operating income for volume levels of 60,000, 70,000, and 90,000 pads.