Grisham Corporation produces and sells a single product.The company has provided its contribution format income statement for February. If the company sells 5, 900 units, its total contribution margin should be closest to:

Question

Grisham Corporation produces and sells a single product.The company has provided its contribution format income statement for February.  If the company sells 5, 900 units, its total contribution margin should be closest to:

Quizplus · Accepted Answer

Selling price per unit = $358, 400 ÷ 5, 600 units = $64 per unit
Variable expense per unit = $229, 600 ÷ 5, 600 units = $41 per unit
Unit CM = $64 per unit - $41 per unit = $23 per unit
Contribution margin = $23 per unit × 5, 900 units = $135, 700

Grisham Corporation Produces and Sells a Single Product