Sugartown Corporation has total sales revenues of $225,000. If their total fixed costs are $40,000 and their total variable costs are $65,000, then the total contribution margin is

Question

Quizplus · Accepted Answer

Total contribution margin is calculated by subtracting total variable costs from total revenue. Thus, the formula for contribution margin is:
Contribution margin = total revenue - total variable costs
Substituting the given values, we get:
Contribution margin = $225,000 - $65,000 = $160,000. 
Therefore, the correct answer is C.

Sugartown Corporation Has Total Sales Revenues of $225,000