Iacopi Corporation is a wholesaler that sells a single product.Management has provided the following cost data for two levels of monthly sales volume.The company sells the product for $172.50 per unit. The best estimate of the total contribution margin when 4,300 units are sold is:
A)$343,140
B)$65,790
C)$121,260
D)$411,080

Question

Iacopi Corporation is a wholesaler that sells a single product.Management has provided the following cost data for two levels of monthly sales volume.The company sells the product for $172.50 per unit.  The best estimate of the total contribution margin when 4,300 units are sold is:
A)$343,140 
B)$65,790 
C)$121,260 
D)$411,080

Quizplus · Accepted Answer

Variable component of cost of goods sold:
Variable cost = Change in costs F1F1F1S1F1F1F10 Change in units
Variable cost = ($384,500 - $307,600) F1F1F1S1F1F1F10 (5,000 - 4,000)
Variable cost = $76.90 per unit
Variable component of selling and administrative expenses:
Variable cost = Change in costs F1F1F1S1F1F1F10 Change in units
Variable cost = ($337,000 - $321,200) F1F1F1S1F1F1F10 (5,000 - 4,000)
Variable cost = $15.80 per unit
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Iacopi Corporation Is a Wholesaler That Sells a Single Product