A project has a contribution margin of $2.16 per unit.If the sales price per unit is $11 and the fixed costs are $24,700,what is the amount of total costs at a production level of 6,000 units? Ignore depreciation.
A)$65,165
B)$81,080
C)$57,460
D)$68,221
E)$77,740

Question

Quizplus · Accepted Answer

The contribution margin per unit is the sales price minus variable cost per unit. Thus, variable cost per unit is $11 - $2.16 = $8.84. Total variable costs for 6,000 units are 6,000 * $8.84 = $53,040. Adding fixed costs of $24,700 gives total costs of $53,040 + $24,700 = $77,740.

A Project Has a Contribution Margin of $2