Frazier Company sells women's ski jackets.The average sales price is $275 and the variable cost per jacket is $175.Fixed Costs are $1,350,000.If Frazier sells 15,000 jackets,the contribution margin will be:
A) $2,775,000
B) $1,500,000
C) $2,250,000
D) $150,000

Question

Quizplus · Accepted Answer

The contribution margin is calculated as (Sales Price - Variable Cost) per unit multiplied by the number of units sold. Here, it's ($275 - $175) * 15,000 = $100 * 15,000 = $1,500,000.

Frazier Company Sells Women's Ski Jackets