Question

Sand Inc., a company that produces and sells a single product, has provided its contribution format income statement for January. Sales (3,200 units) $ 67,200 Variable expenses 38,976 Contribution margin 28,224 Fixed expenses 20,900 Net operating income $ 7,324 If the company sells 3,500 units, its total contribution margin should be closest to:

Answer 1

$30,870

Step-by-step explanation:

Sales per unit: 67,200/3,200 = 21

variable expenses per unit : 38,976/3200 = 12.18

.......................

Sales 3500 unit: 21*3500 = 73,500

Variable expenses 3500 units : 12.18*3500 = 42,630

Contribution margin = Sales-Variable expenses = 73,500-42,630

=$30,870