Baskin Promotions, Inc. sells T-shirts decorated for a variety of concert performers. The company has developed the following budget for the coming year based on a sales forecast of 83,000 T-shirts:

Sales	$ 1,454,990
Cost of Goods Sold	853,240
Gross Profit	601,750
Operating Expenses ($100,000 is fixed)	430,340
Operating Income	171,410
Income Taxes (30% of Operating income)	51,423
Net Income	$ 119,987

Cost of goods sold and variable operating expenses vary directly with sales, and the income tax rate is 30% at all levels of operating income.

If the concert season is slow due to poor weather, Baskin estimates that sales could fall to as low as 63,000 T-shirts.

Required information

In a flexible budget for sales of 63,000 T-shirts, how much would Baskin budget for operating expenses?

A.$250,740.

B. $350,740.

C. $430,340.

D. $330,340.

Required information

What unit cost did Baskin use in budgeting the cost of goods sold for the year?

A. $6.05

B. $10.28.

C .$17.53.

D. Some other amount

Required information

Assume Baskin actually achieves the 63,000 unit sales level, and that net income actually earned at this level was $76,900. A performance report would indicate that net income was:

A. $2,693 over budget.

B. $43,087 under budget.

C. $13,977 under budget.

D. At the budgeted level.