Fiene Sales, Inc., a merchandising company, reported sales of 2,200 units in June at a selling price of $600 per unit. Cost of goods sold, which is a variable cost, was $364 per unit. Variable selling expenses were $23 per unit and variable administrative expenses were $33 per unit. The total fixed selling expenses were $30,500 and the total administrative expenses were $55,300.
-The contribution margin for June was:
A)$1,111,000
B)$396,000
C)$310,200
D)$519,200

Question

Quizplus · Accepted Answer

The contribution margin can be calculated by subtracting variable expenses from total revenues. According to the problem, total revenues were $1,200,000 and variable expenses were $804,000. Therefore, the contribution margin for June was $396,000 (Option B).