The following information is available for Masun Company: $$\begin{array} { l r l r }
\text { Sales } & \$ 550,000 & \text { Total fixed expenses } & \$ 150,000 \
\text { Cost of goods sold } & 390,000 & \text { Total variable expenses } & \$ 370,000
\end{array}$$ A CVP income statement would report
A) gross profit of $160000.
B) contribution margin of $400000.
C) gross profit of $180000.
D) contribution margin of $180000.

Question

The following information is available for Masun Company: $$\begin{array} { l r l r } 
\text { Sales } & \$ 550,000 & \text { Total fixed expenses } & \$ 150,000 \
\text { Cost of goods sold } & 390,000 & \text { Total variable expenses } & \$ 370,000
\end{array}$$ A CVP income statement would report
A) gross profit of $160000.
B) contribution margin of $400000.
C) gross profit of $180000.
D) contribution margin of $180000.

Quizplus · Accepted Answer

The CVP income statement focuses on the contribution margin, which is calculated by subtracting variable costs from sales revenue. Therefore, the correct answer is D, contribution margin of $180,000. The other options are based on traditional income statement calculations that do not take into account the concept of contribution margin.

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

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