Final answer:
Option (C), To calculate the total contribution margin for 10,300 units sold, one must subtract the variable cost per unit from the selling price per unit to find the contribution margin per unit, then multiply by the number of units sold.
For example, if a unit sells for $50 with a variable cost of $30, the unit contribution is $20, thus the total contribution margin for 10,300 units would be $206,000.
Step-by-step explanation:
The question 'If the company sells 10,300 units, what is the total contribution margin?' pertains to the calculation of contribution margin, which is a key concept in managerial accounting and cost accounting. To find the total contribution margin, one would need to know the selling price per unit and the variable cost per unit.
The contribution margin per unit can be calculated by subtracting the variable cost per unit from the selling price per unit. Then, to get the total contribution margin, you would multiply the contribution margin per unit by the total number of units sold, which in this scenario is 10,300 units.
For example, if a company sells a product for $50 per unit and the variable cost per unit is $30, the unit contribution margin would be $50 - $30 = $20. For 10,300 units, the total contribution margin would then be 10,300 units * $20/unit = $206,000.
Referencing one of the self-check questions provided, if a firm had sales revenue of $1 million last year and spent $600,000 on labor, $150,000 on capital, and $200,000 on materials, its accounting profit would be calculated as follows:
Total Expenses = Labor + Capital + Materials
Total Expenses = $600,000 + $150,000 + $200,000 = $950,000
Accounting Profit = Sales Revenue - Total Expenses
Accounting Profit = $1,000,000 - $950,000 = $50,000