Holzhauer Corporation, a merchandising company, reported the following results for March: Cost of goods sold is a variable cost in this company.
-The contribution margin for March is:
A)$922,600
B)$1,120,000
C)$1,962,600
D)$1,360,000

Question

Holzhauer Corporation, a merchandising company, reported the following results for March:  Cost of goods sold is a variable cost in this company. 
-The contribution margin for March is:
A)$922,600 
B)$1,120,000 
C)$1,962,600 
D)$1,360,000

Quizplus · Accepted Answer

To calculate the contribution margin, we need to subtract the variable costs from the total revenue.
Contribution margin = Total revenue - Variable costs
Total revenue for March = $2,500,000
Variable costs for March = $1,380,000 (cost of goods sold) + $0.1 per unit * 10,000 units (shipping cost) = $1,480,000
Contribution margin = $2,500,000 - $1,480,000 = $1,020,000
Therefore, the closest answer is B) $1,120,000.

Holzhauer Corporation, a Merchandising Company, Reported the Following Results for March