Asked by Y. M. Hylton on May 25, 2024
Verified
Quaker Corporation sold 6,600 units of its product at a price of $42.40 per unit.Total variable cost per unit is $19.25,consisting of $10.15 in variable production cost and $9.10 in variable selling and administrative cost.Compute contribution margin for the company.
A) $279,840
B) $119,130
C) $66,990
D) $152,790
E) $60,060
Contribution Margin
The amount by which a product's sales price exceeds its total variable costs, used to cover fixed costs and generate profit.
- Evaluate and appreciate the concept of contribution margin.
Verified Answer
AA
Alparslan Akp?narMay 31, 2024
Final Answer :
D
Explanation :
Contribution Margin = Selling Price per Unit - Total Variable Cost per Unit
Contribution Margin = $42.40 - $19.25
Contribution Margin = $23.15 per unit
Total Contribution Margin = Contribution Margin per unit x Number of units sold
Total Contribution Margin = $23.15 x 6,600
Total Contribution Margin = $152,790
Therefore, the correct answer is D) $152,790.
Contribution Margin = $42.40 - $19.25
Contribution Margin = $23.15 per unit
Total Contribution Margin = Contribution Margin per unit x Number of units sold
Total Contribution Margin = $23.15 x 6,600
Total Contribution Margin = $152,790
Therefore, the correct answer is D) $152,790.
Learning Objectives
- Evaluate and appreciate the concept of contribution margin.