Princess Ariel Company manufactures and sells two types of beach towels, standard and deluxe.  The company budgets the following sales and variable costs for each towel for the upcoming year:                Standard Deluxe   Sales............................................... $450,000 $50,000   Variable expenses ......................... $360,000 $20,000 Princess Ariel also budgets $57,600 in company-wide fixed expenses for the year. Princess Ariel’s actual total sales for the year were $500,000; however, sales of Standard towels were $300,000 and sales of Deluxe towels were $200,000.  Variable and fixed costs were in line with the budget.  Princess Ariel’s actual operating income for the year was:   Answer choices $74,800 $62,400 $122,400 $120,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Princess Ariel Company manufactures and sells two types of beach towels, standard and deluxe.  The company budgets the following sales and variable costs for each towel for the upcoming year:           

 

 

Standard

Deluxe

 

Sales...............................................

$450,000

$50,000

 

Variable expenses .........................

$360,000

$20,000

Princess Ariel also budgets $57,600 in company-wide fixed expenses for the year.

Princess Ariel’s actual total sales for the year were $500,000; however, sales of Standard towels were $300,000 and sales of Deluxe towels were $200,000.  Variable and fixed costs were in line with the budget.  Princess Ariel’s actual operating income for the year was:
 
Answer choices
$74,800
$62,400
$122,400
$120,000
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