Sorin Inc.,a company that produces and sells a single product,has provided its contribution format income statement for January. If the company sells 4,600 units,its total contribution margin should be closest to:
A) $54,600
B) $59,800
C) $69,400
D) $13,362

Question

Sorin Inc.,a company that produces and sells a single product,has provided its contribution format income statement for January.  If the company sells 4,600 units,its total contribution margin should be closest to:
A) $54,600 
B) $59,800 
C) $69,400 
D) $13,362

Quizplus · Accepted Answer

Selling price per unit = Sales ÷ Quantity sold
= $155,400 ÷ 4,200 units = $37 per unit
Variable expenses per unit = Variable expenses ÷ Quantity sold
Variable expenses per unit = $100,800 ÷ 4,200 units = $24 per unit
Unit CM = Selling price per unit - Variable expenses per unit
= $37 per unit - $24 per unit = $13 per unit
Total CM = Unit CM × Quantity sold
= $13 per unit × 4,600 units = $59,800

Sorin Inc,A Company That Produces and Sells a Single Product,has Provided