McCauley Bagpipes produces two models: Model 24 has sales of 500 units with a contribution margin of $40 each; Model 26 has sales of 350 units with a contribution margin of $50 each. If sales of Model 26 increase by 100 units, how much will profit change?
A) $5,000 increase
B) $17,500 increase
C) $22,500 increase
D) $35,000 increase

Question

Quizplus · Accepted Answer

The profit change is calculated by multiplying the increase in units (100) by the contribution margin per unit for Model 26 ($50), resulting in a $5,000 increase.

McCauley Bagpipes Produces Two Models: Model 24 Has Sales of 500