Question

Dartmouth Corporation has provided its contribution format income statement for June. The company produces and sells a single product. Sales (2,800 units) $ 263,200 Variable costs 106,400 Contribution margin 156,800 Fixed costs 135,000 Operating profit $ 21,800 If the company sells 3,000 units, its total contribution margin should be closest to: $23,357. $175,600. $156,800. $168,000.

Answer 1

$168,000

Step-by-step explanation:

Given

Dartmouth Corporation

Contribution format Income Statement

For the month of June.

Sales (2,800 units) $ 263,200

Variable costs 106,400

Contribution margin 156,800

Fixed costs 135,000

Operating profit $ 21,800

We calculated the sales revenue and the variable costs by dividing the total costs with the number of units and multiplying it with 3000 units to get contribution margin for 3000 units.

Calculated.

Dartmouth Corporation

Contribution format Income Statement

For the month of June.

Sales ( 3000 units) ($ 263,200 / 2800) * 3000= $ 282000

Variable costs (106,400 / 2800) * 3000= $ 114000

Contribution margin $ 168,000

Fixed costs 135,000

Operating profit $ 33,000