Question

Delos, Inc. reports the following information for​ April: Sigma Gamma Units sold 2 comma 000 units 800 units Sales price per unit $ 350 $ 800 Variable manufacturing cost per unit 175 460 Sales commission per​ unit: ​Sigma: 4​% of sales price 14 ​Gamma: 6​% of sales price 48 What is the contribution margin of​ Sigma? A. $ 262 comma 000 B. $ 350 comma 000 C. $ 672 comma 000 D. $ 322 comma 000

Answer 1

Answer:

D. $ 322,000

Explanation:

                                                Delos, Inc.

                   Contribution margin format income statement

For sigma

Sales revenue (2,000 units × $350) = $700,000

Less: variable manufacturing cost = (2,000 units × $175) = ($350,000)

Less: sales commission = (700,000 × 4%) = ($28,000)

Contribution margin for sigma = $700,000 - $350,000 - $28,000

Contribution margin = $322,000

Therefore, option D is correct.