Question

Sorin Inc., a company that produces and sells a single product, has provided its contribution format income statement for January. Sales (3,100 units) $ 83,700 Variable expenses 36,828 Contribution margin 46,872 Fixed expenses 37,500 Net operating income $ 9,372 If the company sells 3,800 units, its total contribution margin should be closest to________

Answer 1

Answer:

Total contribution margin=  $69,730

Explanation:

Giving the following information:

Sales (3,100 units) $ 83,700

Variable expenses 36,828

Contribution margin 46,872

The company sells 3,800 units

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

Selling price= 83,700/3,100= $30.23

Unitary variable cost= 36,828/3,100= $11.88

Total contribution margin= 3,800*(30.23 - 11.88)= $69,730