During Its Most Recent Fiscal Year,Raphael Enterprises Sold 200,000 Electric

question 140

Multiple Choice

During its most recent fiscal year,Raphael 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?

• A)$2,400,000.
• B)$1,600,000.
• C)$3,000,000.
• D)$2,000,000.
• E)$1,000,000.

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Definitions:

Response Strategy

A plan of actions designed to address specific challenges, changes, or opportunities in the business environment.

Inventory

The items or goods a company holds for the purpose of resale or production, including raw materials, work-in-progress, and finished goods.

Low-Cost Strategy

A competitive strategy focusing on becoming the lowest cost producer in an industry to offer products or services at the lowest price possible to consumers.

Production Lead Time

The total time required to manufacture an item, including order preparation, queue, setup, run, inspection, and put-away time.