Question

Lasseter Corporation has provided its contribution format income statement for August. The company produces and sells a single product. Sales (4,700 units) $ 206,800 Variable expenses 94,000 Contribution margin 112,800 Fixed expenses 45,400 Net operating income $ 67,400 If the company sells 4,800 units, its total contribution margin should be closest to:

Answer 1

Answer:

Total contribution margin= 115,200

Explanation:

Giving the following information:

Sales (4,700 units) $206,800

Variable expenses 94,000

First, we need to calculate the selling price and the unitary variable cost:

Selling price= 206,800/4,700= $44

Unitary varaible cost= 94,000/4,700= $20

Now, for 4,800 units:

Sales= (4,800*44)= 211,200

Total variable cost= (4,800*20)= (96,000)

Total contribution margin= 115,200