Brees Inc. , a company that produces and sells a single product, has provided its contribution format income statement for April. If the company sells 5, 800 units, its total contribution margin should be closest to:

Question

Brees Inc. , a company that produces and sells a single product, has provided its contribution format income statement for April.  If the company sells 5, 800 units, its total contribution margin should be closest to:

Quizplus · Accepted Answer

Selling price per unit = Sales ÷ Quantity sold
= $136, 400 ÷ 6, 200 units = $22 per unit
Variable expenses per unit = Variable expenses ÷ Quantity sold
Variable expenses per unit = $80, 600 ÷ 6, 200 units = $13 per unit
Unit CM = Selling price per unit - Variable expenses per unit
= $22 per unit - $13 per unit = $9 per unit
Total CM = Unit CM × Quantity sold
= $9 per unit × 5, 800 units = $52, 200

Brees Inc , a Company That Produces and Sells a Single