Use the information below to answer the following question(s).
The following selected data relates to Lazarus Corporation:

-If sales revenue per unit increases to $27 and 8,000 units are sold, what is the contribution margin at the Lazarus Corporation?

Question

Use the information below to answer the following question(s).
The following selected data relates to Lazarus Corporation:
 
-If sales revenue per unit increases to $27 and 8,000 units are sold, what is the contribution margin at the Lazarus Corporation?

Quizplus · Accepted Answer

To calculate the contribution margin, we need to first determine the variable costs per unit. Based on the given data, we know that the variable cost per unit is $12. Therefore, the contribution margin per unit is:

$27 (sales price per unit) - $12 (variable cost per unit) = $15 (contribution margin per unit)

To find the total contribution margin, we multiply the contribution margin per unit by the number of units sold:

$15 (contribution margin per unit) x 8,000 (number of units sold) = $120,000

Therefore, the contribution margin at Lazarus Corporation is $72,000 ($120,000 total contribution margin - $48,000 fixed costs). The correct answer is B.

Use the Information Below to Answer the Following Question(s)