Rogers Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of 2,000 kits was prepared for the year. Fixed operating expenses account for 80% of total operating expenses at this level of sales.
Sales Revenue $100,000
Cost of goods sold (all variable) 60,000
Gross margin 40,000
Operating expenses 35,000
Operating income $5,000
Prepare a flexible budget based on sales of 1,400, 2,500, and 3,500 units