Question

g: Sorin Incorporated, a company that produces and sells a single product, has provided its contribution format income statement for January. Sales (4,200 units) $ 155,400 Variable expenses 100,800 Contribution margin 54,600 Fixed expenses 42,400 Net operating income $ 12,200 If the company sells 4,600 units, its total contribution margin should be closest to:

Answer 1

Total contribution margin= $59,800

Step-by-step explanation:

Giving the following information:

Unitary selling price= 155,400 / 4,200= $37

Unitary variable cost= 100,800 / 4,200= $24

To calculate the total contribution margin, we need to use the following formula:

Total contribution margin= units sold*(selling price - unitary variable cost)

Total contribution margin= 4,600*(37 - 24)

Total contribution margin= $59,800