Outdoor Outfitters has created a flexible budget for the 70,000-unit and the 80,000-unit levels of activity shown as follows. Complete Outdoor Outfitters's flexible budget at the 107,000-unit level of activity. Assume that the cost of goods sold and variable operating expenses vary directly with sales and that income taxes remain at 30 percent of operating income.

	70,000 Units	80,000 Units	107,000 Units
Sales	$1,400,000	$1,600,000	$1,800,000selected answer incorrect
Cost of goods sold	840,000	960,000	1,080,000selected answer incorrect
Gross profit on sales	$560,000	$640,000	$720,000
Operating expenses ($90,000 fixed)	370,000	410,000	450,000selected answer incorrect
Operating income	$190,000	$230,000	$270,000
Income taxes (30% of operating income)	57,000	69,000	81,000selected answer incorrect
Net income	$133,000	$161,000	$189,000