ePiano makes electronic keyboards. The practice model price is $220, and its variable expenses are $190. The deluxe model price is $340, and its variable expenses are $250. The professional model price is $1,200 and its variable expenses are $800. Total fixed expenses are $187,000. In general, ePiano sells six practice models and three deluxe models for every professional model sold.
-Refer to the Figure.What is the total contribution margin of six practice models,three deluxe models,and one professional model?

Question

Quizplus · Accepted Answer

The total contribution margin for six practice models, three deluxe models, and one professional model is calculated as follows:- Practice model contribution margin per unit = Selling price - Variable expenses = $220 - $190 = $30. For six units: $30 * 6 = $180.- Deluxe model contribution margin per unit = Selling price - Variable expenses = $340 - $250 = $90. For three units: $90 * 3 = $270.- Professional model contribution margin per unit = Selling price - Variable expenses = $1,200 - $800 = $400. For one unit: $400 * 1 = $400.Total contribution margin = $180 (practice) + $270 (deluxe) + $400 (professional) = $850.

EPiano Makes Electronic Keyboards