Moonwalker'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. Net income is
A) $500,000.
B) $200,000.
C) $190,000.
D) $90,000.

Question

Quizplus · Accepted Answer

Net income is calculated as (Sales - Variable Expenses - Fixed Expenses). Sales = 5,000 units * $100 = $500,000. Variable Expenses = 5,000 units * $60 = $300,000. Contribution Margin = $500,000 - $300,000 = $200,000. Net Income = $200,000 - $110,000 = $90,000.

Moonwalker's CVP Income Statement Included Sales of 5,000 Units, a Selling