Krazy kayaks sells its entryminuslevel kayaks for $750 each. its variable cost is $500 per kayak. fixed costs are $25,000 per month for volumes up to 1,100 kayaks. above 1,100 kayaks, monthly fixed costs are $60,000. what is the budgeted operating income at a level of 2,500 kayaks per month?
a. $565,000
b. $1,815,000
c. $600,000
d. $625,000

A. $565,000

Explanation:

The computation of the budgeted operating income is shown below:

Sales revenue ($750 × 2,500)                      $1,875,000

Less: Variable cost ($500 ×2,500)               $1,250,000

Contribution margin                                       $625,000

Less: Fixed cost                                              $60,000

Budgeted operating income                        $565,000

i think the answer to your question is b. directive

answer the law of increasing costs;