Stites Corporation will make $100,000 if it sells 8,000 bathtubs for $200 per unit. If the contribution margin is 30%, what will the fixed costs be?

Name: Stites Corporation will make $100,000 if it sells 8,000 bathtubs for $200 per unit. If the contribution margin is 30%, what will the fixed costs be?
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The contribution margin per unit is $60 (30% of $200). Total contribution margin is $480,000 (8,000 units x $60). Profit is $100,000, so fixed costs are $380,000 ($480,000 - $100,000).

Stites Corporation Will Make $100,000 If It Sells 8,000 Bathtubs