During its most recent fiscal year,Dover,Inc.had total sales of $3,200,000.Contribution margin amounted to $1,500,000 and pretax income was $400,000.What amount should have been reported as fixed costs in the company's contribution margin income statement for the year?
A)$1,900,000.
B)$2,800,000.
C)$1,300,000.
D)$1,100,000.
E)$1,700,000.

Question

Quizplus · Accepted Answer

The contribution margin is the amount remaining after variable costs are subtracted from sales. Fixed costs can be calculated by subtracting pretax income from the contribution margin: $1,500,000 (contribution margin) - $400,000 (pretax income) = $1,100,000 (fixed costs).

During Its Most Recent Fiscal Year,Dover,Inc