Cost-Volume-Profit Analysis for Concord Corporation

What would a CVP income statement show for Concord Corporation based on the given data?

a. contribution margin of $420,000.

b. contribution margin of $250,000.

c. gross profit of $250,000.

d. gross profit of $200,000.

Answer:

The CVP income statement for Concord Corporation would report a contribution margin of $250,000 and a gross profit of $200,000.

The data provided for Concord Corporation includes sales of $570,000, total fixed expenses of $150,000, cost of goods sold of $370,000, and total variable expenses of $320,000.

To calculate the contribution margin, we deduct the total variable expenses from the sales figure: Sales = $570,000 Total Variable Expenses = $320,000 Contribution Margin = Sales - Total Variable Expenses = $570,000 - $320,000 = $250,000

Furthermore, to determine the gross profit, we subtract the cost of goods sold from the sales: Sales = $570,000 Cost of Goods Sold = $370,000 Gross Profit = Sales - Cost of Goods Sold = $570,000 - $370,000 = $200,000

Therefore, the CVP income statement for Concord Corporation would show a contribution margin of $250,000 and a gross profit of $200,000. This indicates the company's ability to cover fixed expenses and generate profit as sales volume changes, portraying a positive outlook for the business.