Question

Waterway’s CVP income statement included sales of 5500 units, a unit selling price of $150, unit variable cost of $90, and fixed expenses of $110000. Net income is Select answer from the options below $330000. $825000. $385000. $220000.

Answer 1

To find Waterway's net income, calculate the total sales revenue, subtract the total variable costs and the fixed expenses, and the result is $220,000.

Step-by-step explanation:

Calculating Net Income Using a Cost-Volume-Profit (CVP) Income Statement

To determine the net income for Waterway based on the data provided, we will perform the following calculation using the Cost-Volume-Profit (CVP) analysis:

1. Calculate the total sales revenue by multiplying the unit selling price by the number of units sold: 5500 units × $150 per unit.
2. Calculate the total variable costs by multiplying the unit variable cost by the number of units sold: 5500 units × $90 per unit.
3. Subtract the total variable costs and the fixed expenses from the total sales revenue to find the net income.

Now, let's perform the calculations:

• Total Sales Revenue: 5500 units × $150 = $825,000
• Total Variable Costs: 5500 units × $90 = $495,000
• Net Income: $825,000 (Total Sales) - $495,000 (Variable Costs) - $110,000 (Fixed Costs) = $220,000

Therefore, the net income for Waterway is $220,000.