Escareno Corporation has provided its contribution format income statement for June. The company produces and sells a single product. If the company sells 8,200 units, its total contribution margin should be closest to:

Question

Escareno Corporation has provided its contribution format income statement for June. The company produces and sells a single product.  If the company sells 8,200 units, its total contribution margin should be closest to:

Quizplus · Accepted Answer

Selling price per unit = Sales ÷ Quantity sold
= $764,400 ÷ 8,400 units = $91 per unit
Variable expenses per unit = Variable expenses ÷ Quantity sold
= $445,200 ÷ 8,400 units = $53 per unit
Unit CM = Selling price per unit - Variable expenses per unit
= $91 per unit - $53 per unit = $38 per unit
Total CM = Unit CM × Quantity sold
= $38 per unit × 8,200 units = $311,600

Escareno Corporation Has Provided Its Contribution Format Income Statement for June