Uptown Upholstering Inc. has the following results for the month: Revenues equal $3,500, variable manufacturing costs equal $800, and fixed manufacturing overhead costs equal $900. Which of the following statements is correct?
A) Monthly gross margin is equal to $900.
B) Monthly gross margin is equal to $1,800.
C) Monthly contribution margin is equal to $1,800.
D) Operating income for the month is equal to $2,700.

Question

Quizplus · Accepted Answer

The gross margin equals sales revenues minus variable manufacturing costs less all fixed manufacturing overhead costs. Therefore, gross margin equals $3,500 F1F1F1S1?F1F1F10 $800 F1F1F1S1?F1F1F10 $900 = $1,800