Mats For Life produces yoga mats.Mat A sells for $60 and has a contribution margin ratio of 40%.Mat B sells for $100 and has a contribution margin ratio of 60%.This year the company sold a total of 80,000 mats,of which 30,000 were

Question

Quizplus · Accepted Answer

First, we need to calculate how many units were sold for each mat:
Mat A: 30,000 units
Mat B: 80,000 - 30,000 = 50,000 units

Next, we can use the contribution margin ratio to calculate the total contribution margin for each mat:

Mat A: $60 x 40% = $24 contribution margin per unit
Mat B: $100 x 60% = $60 contribution margin per unit

Total contribution margin for Mat A: 30,000 units x $24 = $720,000
Total contribution margin for Mat B: 50,000 units x $60 = $3,000,000

Finally, we can add up the total contribution margins for both mats to get the company's total contribution margin:

$720,000 + $3,000,000 = $3,720,000

Therefore, the correct answer is B. The company sold 50,000 mats in total and earned a total contribution margin of $3,162,000.

Mats for Life Produces Yoga Mats