Souza Incorporated, which produces and sells a single product, has provided its contribution format income statement for October. If the company sells 3,600 units, its total contribution margin should be closest to:

Question

Souza Incorporated, which produces and sells a single product, has provided its contribution format income statement for October.  If the company sells 3,600 units, its total contribution margin should be closest to:

Quizplus · Accepted Answer

To find the total contribution margin when 3,600 units are sold, we need to multiply the contribution margin per unit by the number of units sold:
Contribution margin per unit = selling price per unit - variable expenses per unit
= $60 - $30 - $10
= $20
Total contribution margin = contribution margin per unit × number of units sold
= $20 × 3,600
= $72,000
Therefore, the closest answer is C) $43,200.

Souza Incorporated, Which Produces and Sells a Single Product, Has