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Assume that a company provided the following cost formulas for three of its expenses (where q refers to the number of hours worked): Rent (fixed) $3,000 Supplies (variable) $4

Accounting

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Assume that a company provided the following cost formulas for three of its expenses (where q refers to the number of hours worked): Rent (fixed) $3,000 Supplies (variable) $4.00q Utilities (mixed) $150 + $0.75q The company’s planned level of activity was 2,000 hours and its actual level of activity was 1,900 hours. If these are the company’s only three expenses and the company uses revenue formula of $8.90q for budgeting purposes, what net operating income would appear in the company’s flexible budget?

Multiple Choice

$4,835

$4,985

$4,735

$4,885