Chance,Inc.sold 3,000 units of its product at a price of $72 per unit.Total variable cost per unit is $51,consisting of $32 in variable production cost and $19 in variable selling and administrative cost.Compute the manufacturing margin for the company under variable costing.
A)$96,000
B)$63,000
C)$120,000
D)$216,000
E)($90,000)

Question

Quizplus · Accepted Answer

Manufacturing margin under variable costing is calculated by subtracting the variable production costs from the total sales revenue. Total sales revenue is 3,000 units * $72 = $216,000. Total variable production cost is 3,000 units * $32 = $96,000. Therefore, manufacturing margin = $216,000 - $96,000 = $120,000.