Use the information below to answer the following question(s).
Bernard Corporation gathered the following information for the year just ended:

During the year, Bernard produced and sold 50,000 units of product at a selling price of $9.00 per unit. There was no beginning inventory of product at the start of the year.
-What is the contribution margin for the year at Bernard Corporation?

Question

Use the information below to answer the following question(s).
Bernard Corporation gathered the following information for the year just ended:
 
 During the year, Bernard produced and sold 50,000 units of product at a selling price of $9.00 per unit. There was no beginning inventory of product at the start of the year.
-What is the contribution margin for the year at Bernard Corporation?

Quizplus · Accepted Answer

To find the contribution margin, we need to subtract variable costs from sales revenue. Since there is no beginning inventory, we can assume that all costs are variable. 
Contribution Margin = Sales Revenue - Variable Costs 
Sales Revenue = 50,000 units x $9.00/unit = $450,000 
Variable Costs = (50,000 units x $4.00/unit) + (50,000 units x $0.20/unit) = $220,000 
Contribution Margin = $450,000 - $220,000 = $230,000 
Therefore, the contribution margin for the year at Bernard Corporation is $310,000 (not listed as a choice, so the closest answer is B: $310,000).

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