Hathaway Inc. produces and sells golf umbrellas to local resorts. Hathaway anticipates April to be a busy month with the sale of 2,000 umbrellas. The company has prepared the following static budget for April:
Sales revenue (2,000 units).........................$60,000
Variable costs:
Direct materials..........................................6,000
Direct labor...............................................8,000
Overhead.................................................2,500
Fixed costs................................................6,000
Net operating income.................................$37,500
During April, Hathaway actually produced and sold 2,300 umbrellas. What should be Hathaway's net operating income in April based on a flexible budget?
a. $43,125
b. $44,025
c. $35,025
d. $37,500