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During Its Most Recent Fiscal Year, Simon Enterprises Sold 200,000

question 129

Multiple Choice

During its most recent fiscal year, Simon Enterprises sold 200,000 electric screwdrivers at a price of $15 each. Fixed costs amounted to $400,000 and pretax income was $600,000. What amount should have been reported as variable costs in the company's contribution margin income statement for the year in question?

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Definitions:

Stock Split

A corporate action where a company divides its existing shares into multiple shares to boost the liquidity of the shares, though the market capitalization remains the same.

Market Price

Market price is the current value at which an asset or service can be bought or sold in a marketplace.

Shares Outstanding

Represents the total number of shares of stock that are currently owned by the company's shareholders, including shares held by institutional investors and restricted shares owned by the company’s officers and insiders.

Retained Earnings Statement

A financial statement that shows how a company's retained earnings have changed during a specific period.