If the company sells 3,800 units, its total contribution margin should be closest to:
A)$16,227
B)$59,200
C)$60,800
D)$62,100

Question

Quizplus · Accepted Answer

To calculate the contribution margin, we need to first calculate the contribution margin per unit.

Given: 
Selling price per unit = $40 
Variable cost per unit = $24

Contribution margin per unit = Selling price per unit - Variable cost per unit 
Contribution margin per unit = $40 - $24 
Contribution margin per unit = $16

Now, we can calculate the total contribution margin by multiplying the contribution margin per unit by the number of units sold:

Total contribution margin = Contribution margin per unit x Number of units sold 
Total contribution margin = $16 x 3,800 
Total contribution margin = $60,800

Therefore, the answer is C) $60,800.

If the Company Sells 3,800 Units, Its Total Contribution Margin