Question

Crane Company sells 50000 units for $10 a unit. Fixed costs are $350000 and net income is $100000. What should be reported as variable expenses in the CVP income statement?

Answer 1

Answer:

Variable expenses = $50,000

Explanation:

Given:

Sales price = 50,000 x $10 = $500,000

Fixed costs = $350,000

Net income = $100,000

Find:

Variable expenses

Computation:

Variable expenses = Sales price - Fixed costs - Net income

Variable expenses = $500,000 - $350,000 - $100,000

Variable expenses = $50,000