Question

A company’s CVP income statement included sales of 5,000 units, a selling price of $100, variable expenses of $60 per unit, and fixed expenses of $110,000. What is net income? *

Answer 1

$90,000

Step-by-step explanation:

calculating profit using contribution margin method;

units sold: 5000

selling price: $100

variable costs: $60

fixed cost: $110,000

conribution margin per item= selling price- variable costs

=$100- $60

=$40

Total CMargin = Contribution margin per unit x total units sold

= $40X5000

= $200,000

net Income = total conribution margin - fixed costs

= $200,000- $110,00

= $90,000