The equation which reflects a CVP income statement is
A) Sales = Cost of goods sold + Operating expenses + Net income.
B) Sales + Fixed costs = Variable costs + Net income.
C) Sales - Variable costs + Fixed costs = Net income.
D) Sales - Variable costs - Fixed costs = Net income.

Question

Quizplus · Accepted Answer

The correct equation for a Cost-Volume-Profit (CVP) income statement is D) Sales - Variable costs - Fixed costs = Net income. This equation is used to analyze how changes in cost and volume affect a company's operating income and net income.

The Equation Which Reflects a CVP Income Statement Is