We know that:
Total sales = 100,000 wrenches * $12/unit = $1,200,000
Net income = $200,000
Fixed costs = $300,000
Total expenses (fixed + variable) = Total sales - Net income
Total expenses = $1,200,000 - $200,000 = $1,000,000
Now, we need to find the variable expenses:
Variable expenses = Total expenses - Fixed costs
Variable expenses = $1,000,000 - $300,000 = $700,000
So the correct answer is (a) $700,000.
Cournot Company sells 100,000 wrenches for
$12 a unit. Fixed costs are $300,000, and net income
is $200,000. What should be reported as
variable expenses in the CVP income statement?
(a) $700,000. (c) $500,000.
(b) $900,000. (d) $1,000,000.
1 answer
1 answer