Woolford's CVP income statement included sales of 5,000 units, a selling price of $50, variable expenses of $30 per unit, and net income of $25,000. Fixed expenses are
A) $75,000.
B) $100,000.
C) $150,000.
D) $250,000.

Question

Quizplus · Accepted Answer

Fixed expenses can be calculated using the formula: Fixed Expenses = Total Sales - (Variable Expenses per Unit * Number of Units) - Net Income. Here, Total Sales = 5,000 units * $50 = $250,000; Variable Expenses = 5,000 units * $30 = $150,000. Therefore, Fixed Expenses = $250,000 - $150,000 - $25,000 = $75,000.

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