Question

Fox Corporation has provided its contribution format income statement for June. The company produces and sells a single product: sales (2,700 units), $261,900; variable costs, $102,600; contribution margin, $159,300; fixed costs, $136,300; and operating profit, $23,000.If the company sells 3,000 units, its total contribution margin should be closest to _____.A. $25,556

Answer 1

Total contribution margin= $177,000

Step-by-step explanation:

First, we need to calculate the unitary contribution margin:

Unitary contribution margin= total contribution margin / number of units

Unitary contribution margin= 159,300 / 2,700

Unitary contribution margin= $59

Now, the total contribution margin for 3,000 units:

Total contribution margin= 3,000*59

Total contribution margin= $177,000