At a sales level of $300,000,James Company's gross margin is $15,000 less than its contribution margin,its operating income is $50,000,and its total selling and administrative expenses are $120,000.At this sales level,what is the company's contribution margin?
A) $155,000.
B) $170,000.
C) $185,000.
D) $250,000.

Question

Quizplus · Accepted Answer

The contribution margin is calculated by adding the gross margin to the difference between the gross margin and the contribution margin ($15,000), and then adding the operating income ($50,000) and the total selling and administrative expenses ($120,000). Therefore, the contribution margin is $185,000.

At a Sales Level of $300,000,James Company's Gross Margin Is