Lepage Corporation has provided its contribution format income statement for January. The company produces and sells a single product. If the company sells 4,700 units, its total contribution margin should be closest to:
A)$83,600
B)$18,373
C)$89,300
D)$98,000

Question

Lepage Corporation has provided its contribution format income statement for January. The company produces and sells a single product.  If the company sells 4,700 units, its total contribution margin should be closest to:
A)$83,600 
B)$18,373 
C)$89,300 
D)$98,000

Quizplus · Accepted Answer

To find the total contribution margin at 4,700 units sold, we can use the contribution margin per unit from the income statement:

Contribution Margin per unit = Sales price per unit - Variable expenses per unit
Contribution Margin per unit = $25 - $7
Contribution Margin per unit = $18

Total Contribution Margin at 4,700 units sold:
Total Contribution Margin = Contribution margin per unit x Number of units sold
Total Contribution Margin = $18 x 4,700
Total Contribution Margin = $84,600

The closest answer choice to this amount is C, $89,300.

Lepage Corporation Has Provided Its Contribution Format Income Statement for January