The following information applies to Hawks Corporation: Using variable costing, what will Hawks record as contribution margin if the units were sold for $95 each and assuming no variances were reported?
A)$504,000.
B)$1,476,000.
C)$1,548,000.
D)$1,908,000.

Question

The following information applies to Hawks Corporation:  Using variable costing, what will Hawks record as contribution margin if the units were sold for $95 each and assuming no variances were reported?
A)$504,000. 
B)$1,476,000. 
C)$1,548,000. 
D)$1,908,000.

Quizplus · Accepted Answer

0 + 40,000 - 4,000 = 36,000 units
$22 + $15 + $5 = $42 per unit.
36,000 x $42 = $1,548,000
36,000 x $95 = $3,420,000
$3,420,000 - $1,944,000 - ($10 * 36,000) = $1,548,000
Beg inv + units produced - end inv = units sold
DL per unit + Dm per unit + VMOH per unit = variable product cost per unit
Units sold x variable product cost per unit = COGS
Units sold x selling price per unit = sales
Sales - COGS - (V op Exp per unit x units sold) = CM

The Following Information Applies to Hawks Corporation: Using Variable