Lepage Corporation has provided its contribution format income statement for January. The company produces and sells a single product. If the company sells 4,700 units, its total contribution margin should be closest to:
A)$83,600
B)$18,373
C)$89,300
D)$98,000

Question

Lepage Corporation has provided its contribution format income statement for January. The company produces and sells a single product.  If the company sells 4,700 units, its total contribution margin should be closest to:
A)$83,600 
B)$18,373 
C)$89,300 
D)$98,000

Quizplus · Accepted Answer

To find the total contribution margin when 4,700 units are sold, we need to first calculate the contribution margin per unit, which is $26 ($61 - $35).

Then, we can multiply the contribution margin per unit by the number of units sold:

$26 x 4,700 = $122,200

However, this is the total contribution, not just the contribution margin. To find the contribution margin, we need to subtract the total variable expenses from the total contribution:

$122,200 - $32,900 = $89,300

Therefore, the closest answer choice is C) $89,300.

Lepage Corporation Has Provided Its Contribution Format Income Statement for January