Paulsen Company sells 100,000 units for $15 a unit. Fixed costs are $350,000 and net income is $250,000. What should be reported as variable expenses in the CVP income statement?
A) $600,000.
B) $900,000.
C) $1,125,000.
D) $1,150,000.

Question

Quizplus · Accepted Answer

To find the variable expenses, we first calculate total sales revenue (100,000 units x $15 = $1,500,000). Then, subtract fixed costs ($350,000) and net income ($250,000) from total sales to find total variable expenses: $1,500,000 - $350,000 - $250,000 = $900,000.

Paulsen Company Sells 100,000 Units for $15 a Unit