The following information is available for Wade Corp.: $$\begin{array} { l r l }
\text { Sales } & \$ 580,000 & \text { Total fixed expenses } \$ 150,000 \
\text { Cost of goods sold } & 390,000 & \text { Total variable expenses } 360,000
\end{array}$$ A CVP income statement would report
A) gross profit of $190000.
B) contribution margin of $430000.
C) gross profit of $220000.
D) contribution margin of $220000.

Question

The following information is available for Wade Corp.: $$\begin{array} { l r l } 
\text { Sales } & \$ 580,000 & \text { Total fixed expenses } \$ 150,000 \
\text { Cost of goods sold } & 390,000 & \text { Total variable expenses } 360,000
\end{array}$$ A CVP income statement would report
A) gross profit of $190000.
B) contribution margin of $430000.
C) gross profit of $220000.
D) contribution margin of $220000.

Quizplus · Accepted Answer

A CVP (Cost-Volume-Profit) income statement analyzes the relationship between sales volume, costs, and profits. It reports the contribution margin, which is the difference between total revenue and variable expenses. Based on the information given, we can calculate the contribution margin for Wade Corp. as follows:
Revenue - Variable Expenses = Contribution Margin
$650,000 - $220,000 = $430,000
Therefore, the correct answer is D) contribution margin of $430,000.

The Following Information Is Available for Wade Corp A CVP Income Statement Would Report A) Gross Profit of l

The Following Information Is Available for Wade Corp A CVP Income Statement Would Report
A) Gross Profit of l