Exercise D6-1

Your answer is incorrect.Try again.Rogers Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of 2,000 kits was prepared for the year. Fixed operating expenses account for 80% of total operating expenses at this level of sales.

Sales Revenue

$100,000

Cost of goods sold (all variable)

60,000

Gross margin

40,000

Operating expenses

35,000

Operating income

$5,000