Final answer:
The total contribution margin for Aaron Corporation under variable costing for the month is $72,850, calculated by subtracting the variable costs from the selling price and multiplying by the number of units sold.
Step-by-step explanation:
To calculate the total contribution margin for the month under variable costing for Aaron Corporation, we need to consider the selling price and variable costs per unit sold, as well as the number of units sold. The contribution margin per unit is the selling price minus the variable costs. To get the total contribution margin, we multiply this figure by the number of units sold.
First, let's calculate the contribution margin per unit:
Selling Price per Unit: $101
Total Variable Costs per Unit: $17 (Direct Materials) + $43 (Direct Labor) + $7 (Variable Manufacturing Overhead) + $3 (Variable Selling and Administrative Expenses) = $70
Contribution Margin per Unit: $101 - $70 = $31
Now, we can determine the total contribution margin:
Total Units Sold: 2,350
Total Contribution Margin = Contribution Margin per Unit x Units Sold = $31 x 2,350 = $72,850
Therefore, the total contribution margin for the month under variable costing is $72,850.