Woolford's CVP income statement included sales of 4,000 units, a selling price of $50, variable expenses of $30 per unit, and net income of $25,000.Fixed expenses are
A)$55,000.
B)$80,000.
C)$120,000.
D)$200,000.

Question

Quizplus · Accepted Answer

To find fixed expenses, first calculate total contribution margin: (Selling price - Variable expenses) x Units = ($50 - $30) x 4,000 = $80,000. Then, subtract net income from total contribution margin: $80,000 - $25,000 = $55,000. Thus, fixed expenses are $55,000.

Woolford's CVP Income Statement Included Sales of 4,000 Units, a Selling