A. The best way to determine this is to prepare an operating income statement for each of the production and sales options given in the answer choices. This answer could result from any error in calculations or in evaluating the results of the calculations. See correct answer for details.
B. The best way to determine this is to prepare an operating income statement for each of the production and sales options given in the answer choices. Sales are based on the units sold multiplied by the sales price per unit, variable costs are based on the number of units sold multiplied by the variable cost per unit for the applicable range, and total fixed costs for each relevant range need to be included as given. Operating income is sales minus variable costs minus fixed costs.
The highest operating income level occurs at sales of 14 units.
C. The best way to determine this is to prepare an operating income statement for each of the production and sales options given in the answer choices. This answer could result from any error in calculations or in evaluating the results of the calculations. See correct answer for details.
D. The best way to determine this is to prepare an operating income statement for each of the production and sales options given in the answer choices. This answer could result from any error in calculations or in evaluating the results of the calculations. See correct answer for details.
