Question

Sorin Inc., a company that produces and sells a single product, has provided its contribution format income statement for January. Sales (3,600 units)$108,000 Variable expenses 49,680 Contribution margin 58,320 Fixed expenses 44,300 Net operating income$14,020 If the company sells 4,300 units, its total contribution margin should be closest to: (Do not round intermediate calculations.)

Answer 1

$69,660

Step-by-step explanation:

For computing the contribution margin first we have to determine the contribution margin per unit which is shown below:

Contribution margin per unit = Contribution margin ÷ Number of units

= $58,320 ÷ 3,600 units

= $16.2

Now if the sales unit is 4,300 so the contribution margin is

= Sales units × contribution margin per unit

= 4,300 units × $16.20

= $69,660