Weiss Corporation produces two models of wood chairs, Colonial and Early American. The Colonial sells for $60 per chair and the Early American sells for $80 per chair. Variable expenses for each model are as follows:
Total fixed expenses are $39,600 per month. Expected monthly sales are: Colonial, 1,800 units; Early American, 600 units.
-The contribution margin per chair for the Colonial model is:

Question

Weiss Corporation produces two models of wood chairs, Colonial and Early American. The Colonial sells for $60 per chair and the Early American sells for $80 per chair. Variable expenses for each model are as follows: 
Total fixed expenses are $39,600 per month. Expected monthly sales are: Colonial, 1,800 units; Early American, 600 units.
-The contribution margin per chair for the Colonial model is:

Quizplus · Accepted Answer

The contribution margin per chair for the Colonial model is calculated by subtracting the variable cost per chair ($84) from the selling price per chair ($100). Therefore, the contribution margin per chair is $16 ($100 - $84). Choice B is the correct answer.

Weiss Corporation Produces Two Models of Wood Chairs, Colonial and Early