Question

During March, a firm expects its total sales to be $160,000, its total variable costs to be $95,000, and its total fixed costs to be $25,000. The contribution margin for March is: Multiple Choice

Answer 1

$65,000

Step-by-step explanation:

contribution margin = total sales revenue - total variable costs = $160,000 - $95,000 = $65,000

if you want to calculate the contribution margin per units, all you need to do is divide the total contribution margin by the total number of units sold.

for example, if total units = 10,000

contribution margin per unit = $65,000 / 10,000 = $6.50