What is the contribution margin under the expected case scenario?

Question

Quizplus · Accepted Answer

Under the expected case scenario, the company will sell 375,000 units and each unit will contribute a contribution margin of $0.08 + $0.25 = $0.33. Thus, the total contribution margin will be $0.33 x 375,000 = $123,750.

The best choice is D as it provides the highest contribution margin among all the options. Option A and B have lower contribution margins, and option C and E are not feasible as they require the company to sell more units than the expected case scenario.

What Is the Contribution Margin Under the Expected Case Scenario