Keomuangtai Corporation produces and sells a single product. The company has provided its contribution format income statement for October. If the company sells 4,500 units, its total contribution margin should be closest to:

Question

Keomuangtai Corporation produces and sells a single product. The company has provided its contribution format income statement for October.  If the company sells 4,500 units, its total contribution margin should be closest to:

Quizplus · Accepted Answer

Selling price per unit = $266,800 ÷ 4,600 units = $58 per unit
Variable expense per unit = $179,400 ÷ 4,600 units = $39 per unit
Unit CM = $58 per unit - $39 per unit = $19 per unit
Contribution margin = $19 per unit × 4,500 units =$85,500

Keomuangtai Corporation Produces and Sells a Single Product