Question

During march, a firm expects its total sales to be $150,000, its total variable costs to be $94,000, and its total fixed costs to be $24,000. the contribution margin for march is:_________

Answer 1

The contribution margin for the march is $57,800.

What is the contribution margin?

• The contribution margin (CM), also known as the dollar contribution per unit, is the difference between the selling price and the variable cost per unit.
• "Contribution" refers to the portion of sales revenue that is not consumed by variable costs and thus contributes to fixed cost coverage.
• This concept is a fundamental component of break-even analysis.
• Contributions plus Variable Costs are the components of sales.
• Costs are linear in volume in the Cost-Volume-Profit Analysis model.
• As an example: a company expects total sales of $150,000 in March, total variable costs of $94,000, and total fixed costs of $24,000. So, its march's contribution margin is $57,800.

Therefore, the contribution margin for the march is $57,800.

Know more about the contribution margin here:

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