Boersma Sales, Incorporated a merchandising company, reported sales of 7,100 units in September at a selling price of $682 per unit. Cost of goods sold, which is a variable cost, was $317 per unit. Variable selling expenses were $44 per unit and variable administrative expenses were $22 per unit. The total fixed selling expenses were $157,200 and the total administrative expenses were $338,000.The contribution margin for September was:
A) $3,878,400
B) $2,122,900
C) $2,591,500
D) $1,627,700

Question

Quizplus · Accepted Answer

The contribution margin is calculated as (Selling Price per Unit - Variable Costs per Unit) * Units Sold. Variable costs per unit include cost of goods sold, variable selling expenses, and variable administrative expenses. Therefore, the calculation is: ($682 - $317 - $44 - $22) * 7,100 = $299 * 7,100 = $2,122,900.

Boersma Sales, Incorporated a Merchandising Company, Reported Sales of 7,100