Cost and Management AccountingQuestion 5426 of 251
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10. What is the budgeted net income for the year?

Options

A` 10,41,667
B` 13,66,650
C` 10,67,000
D` 10,37,000
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Correct Answer

✅ Option A — ` 10,41,667

All Options:

  • A` 10,41,667 ✓
  • B` 13,66,650
  • C` 10,67,000
  • D` 10,37,000

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Detailed Solution & Explanation

The budgeted net income is calculated as follows:
Total Revenue=1,00,000 units×₹50/unit=₹50,00,000\text{Total Revenue} = 1,00,000 \text{ units} \times \text{₹} 50/\text{unit} = \text{₹} 50,00,000
Total Variable Cost=1,00,000 units×₹36.3333/unit=₹36,33,333\text{Total Variable Cost} = 1,00,000 \text{ units} \times \text{₹} 36.3333/\text{unit} = \text{₹} 36,33,333
Contribution=₹50,00,000−₹36,33,333=₹13,66,667\text{Contribution} = \text{₹} 50,00,000 - \text{₹} 36,33,333 = \text{₹} 13,66,667
Net Income=Contribution−Fixed Manufacturing Costs−Fixed Admin & Selling Expenses\text{Net Income} = \text{Contribution} - \text{Fixed Manufacturing Costs} - \text{Fixed Admin \& Selling Expenses}
Net Income=₹13,66,667−₹3,00,000−₹25,000=₹10,41,667\text{Net Income} = \text{₹} 13,66,667 - \text{₹} 3,00,000 - \text{₹} 25,000 = \text{₹} 10,41,667
Hence, **Option A** is the correct answer.

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