VaughnSports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of2,500kits was prepared for the year. Fixed operating expenses account for75% of total operating expenses at this level of sales.

Sales Revenue $265,000

Cost of goods sold (all variable) 180,000

Gross margin 85,000

Operating expenses 50,000

Operating income $35,000

budget based on sales of1,200,2,580, and3,840units.

Unit 1,200 2,580 3,840