Question

Russell Inc. had sales of $2,300,000 for the first quarter of 2017. In making the sales, the company incurred the following costs and expenses.
Variable Fixed
Cost of goods sold $940,000 $464,000
Selling expenses 74,000 54,000
Administrative expenses 96,000 145,000
Prepare a CVP income statement for the quarter ended March 31, 2017.

Answer 1

Answer:

$527,000

Explanation:

Preparation of a CVP income statement for the quarter ended March 31, 2017.

Russell Inc.income statement for the quarter ended March 31, 2017.

Sales $2,300,000

VARIABLE EXPENSES

Cost of goods sold $940,000

Selling expenses 74,000

Administrative expenses 96,000

Total Variable Expenses 1,110,000

Contribution Margin 1,190,000

($2,300,000-$1,110,000)

FIXED EXPENSES

Cost of goods sold $464,000

Selling expenses 54,000

Administrative expenses 145,000

Total Fixed Expenses 663,000

Net Income/(Loss) $527,000

(1,190,000-663,000)