Question

High-Tech Computer Services provides services to corporate and individual customers. During the month of June, the corporate business segment provided services to 300 customers and earned $60,000 in revenue. The individual business segment provided services to 400 customers and earned $35,000 in revenue. The variable costs for the corporate and individual business segments amounted to $33,000 and $25,000, respectively. In addition, the fixed costs of the company amounted to $8,000. Calculate the contribution margin from each corporate customer. (Round your answer to the nearest cent.)
A) $5.00
B) $25.00
C) $90.00
D) $63.33

Answer 1

Answer:

C) $90.00

Explanation:

Solution:

Contribution Margin per customer = Revenues per customer - Variable Expenses per customer

Revenues per customer = 60,000 / 300 = 200

Variable Expenses per customer = 33,000 / 300 = 110

Contribution Margin per customer = 200 - 110

= $90.00

Therefore Correct Answer = Option C (Contribution Margin from each corporate customer = $90.00