Question

ABAC Farms expects to sell 25,000 units of its product at $11 per unit and to incur variable costs per unit of $6. Total fixed costs are $70,000. The total contribution margin is:

Answer 1

Answer: $125,000

Step-by-step explanation:

The Contribution margin is the Sales revenue less the Variable cost.

Revenue

= 25,000 * 11

= $275,000

Variable costs

= 25,000 * 6

= $150,000

Total Contribution Margin

= 275,000 - 150,000

= $125,000