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 $190,000.
B)contribution margin of $430,000.
C)gross profit of $220,000.
D)contribution margin of $220,000.

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 $190,000.
B)contribution margin of $430,000.
C)gross profit of $220,000.
D)contribution margin of $220,000.

Quizplus · Accepted Answer

The contribution margin is calculated as Sales minus Total Variable Expenses, which is $580,000 - $360,000 = $220,000.

The Following Information Is Available for Wade Corp A CVP Income Statement Would Report A)gross Profit of $190,000

The Following Information Is Available for Wade Corp A CVP Income Statement Would Report
A)gross Profit of $190,000