Wight Corporation has provided its contribution format income statement for June. The company produces and sells a single product. If the company sells 5,000 units, its total contribution margin should be closest to: (Do not round intermediate calculations.)

Question

Wight Corporation has provided its contribution format income statement for June. The company produces and sells a single product.  If the company sells 5,000 units, its total contribution margin should be closest to: (Do not round intermediate calculations.)

Quizplus · Accepted Answer

Using the formula: 
Total Contribution Margin = (Unit Selling Price x Number of units sold) - Total Variable Costs 
Total Contribution Margin = (16 x 5000) - (60,000 + 10 x 5000) 
Total Contribution Margin = 80,000 - 110,000 
Total Contribution Margin = -30,000

However, since the question asks for the closest answer, we choose the option with the highest positive contribution margin, which is C) $80,000.

Wight Corporation Has Provided Its Contribution Format Income Statement for June