Question 1:

1. OMalley Company sells 100,000 units for $13 a unit. Fixed costs are $350,000 and net income is $250,000. What should be reported as variable expenses in the CVP income statement?

a. $600,000.

b. $700,000.

c. $950,000.

d. $1,050,000.

2. For Gossen Company, actual sales are $1,000,000 and break -even sales are $840,000. Compute the margin of safety ratio.

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3. For Brownstone company, variable costs are 70% of sales, and fixed costs are $195,000 and net income goal is $75,000. Compute the required sales in dollars needed to achieve target net income of $75,000.(Use the contribution margin approach)