Greg's Golf Carts produces two models: Model 24 has sales of 500 units with a contribution margin of $40 each; Model 26 has sales of 350 units with a contribution margin of $50 each. If sales of Model 26 increase by 100 units, how much will profit change?
A) $5,000 increase
B) $17,500 increase
C) $22,500 increase
D) $35,000 increase

Question

Quizplus · Accepted Answer

The profit change is calculated by multiplying the increase in units sold by the contribution margin per unit. For Model 26, this is 100 units * $50 = $5,000 increase in profit.

Greg's Golf Carts Produces Two Models: Model 24 Has Sales