Asked by Riley Runnells on Jun 28, 2024
Verified
If the company sells 9,100 units, its total contribution margin should be closest to:
A) $174,500
B) $192,000
C) $52,135
D) $182,000
Total Contribution Margin
The difference between a company's sales revenue and variable costs, representing the amount available to cover fixed costs and contribute to profit.
- Grasp the calculation and significance of the contribution margin and contribution margin ratio.
Verified Answer
ZK
Zybrea KnightJul 03, 2024
Final Answer :
D
Explanation :
Selling price per unit = $336,000 ÷ 9,600 units = $35 per unit
Variable expense per unit = $144,000 ÷ 9,600 units = $15 per unit
Unit CM = $35 per unit - $15 per unit = $20 per unit
Contribution margin = $20 per unit × 9,100 units = $182,000
Variable expense per unit = $144,000 ÷ 9,600 units = $15 per unit
Unit CM = $35 per unit - $15 per unit = $20 per unit
Contribution margin = $20 per unit × 9,100 units = $182,000
Learning Objectives
- Grasp the calculation and significance of the contribution margin and contribution margin ratio.
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