The following information pertains to the Northwest Territory of Burger King Company: $\begin{array}{lr}
\text { Net Sales } & \$ 6,000 \
\text { Variable costs: } & \
\text { Cost of merchandise sold } & 1,200 \
\text { Operating expenses } & 450 \
\text { Fixed costs: } & \
\text { Controllable by segment manager } & 1,600 \
\text { Controllable by others } & 1,250 \
\text { Unallocated costs } & 750
\end{array}$ The contribution margin is _____.
A)$2,750
B)$3,650
C)$4,350
D)$2,500

Question

Quizplus · Accepted Answer

The contribution margin is calculated as Net Sales minus Variable Costs. Here, Net Sales = $6,000 and Variable Costs (Cost of merchandise sold + Operating expenses) = $1,200 + $450 = $1,650. Thus, Contribution Margin = $6,000 - $1,650 = $4,350.

The Following Information Pertains to the Northwest Territory of Burger