The Following Income Statement Was Produced When Volume of Sales

question 65

Multiple Choice

The following income statement was produced when volume of sales was at 400 units. $$\begin{array} { | l | l r | } \hline \text { Sales Revenue } & \$ & 2,000 \\\text { Variable Cost } & & 1,200 \\ \text { Contribution Margin } & \$ & 800 \\\text { Fixed Cost } & & 300 \\\text { Net Income } & \$ & 500 \\\hline\end{array}$$ If volume reaches 500 units,net income will be:

• A) $625
• B) $1,800
• C) $700
• D) None of the above

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Definitions:

Capital

Refers to the wealth, either financial or other resources, possessed by an individual or business that can be used for investment or operational purposes.

Timing

The act of choosing the optimal moment to execute an action in order to achieve the desired outcome.

Harvest Strategy

A business plan for extracting the value of an investment, typically when a firm is ready to be sold or liquidated.

Time Frame

A specified period during which certain activities or events occur or are completed.