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drek231 [11]
3 years ago
6

Frazier Company sells women's ski jackets. The average sales price is $272 and the variable cost per jacket is $122. Fixed Costs

are $1,247,000. I razier sells 14,700 jackets, the contribution margin will be:a.$958,000 b.$2,205,000 c.$2.751400 d.$835,400
Business
1 answer:
padilas [110]3 years ago
4 0

Answer:

b. $2,205,000

Explanation:

We know,

Contribution Margin = Sales (Revenues) - Variable Cost (expense)

Contribution margin is the difference between sales and variable cost.

Given,

Sales per unit = $272

Variable cost per unit = $122

Sales volume (Number of Ski Jackets) = 14,700 jackets

Now, we use contribution margin format income statement to determine the contribution margin for 14,700 jackets.

Sales ($272 × 14,700 jackets)                                             $3,998,400

<u>Less: Variable expense ($122 × 14,700 jackets)                $(1,793,400)</u>

Contribution Margin [($272 - 122) × 14,700 jackets]  = $2,205,000

Therefore, option B is the answer.

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