Answer:
the question is incomplete:
The Kowalski Company has three product lines of belts - A, B, and C - with contribution margins of $3, $2, and $1, respectively. The president foresees sales of 180,000 units in the coming period, consisting of 18,000 units of A, 90,000 units of B, and 72,000 units of C. The company's fixed costs for the period are $272,000. Read the requirements.
2. If the sales mix is maintained, what is the total contribution margin when 180,000 units are sold? What is the operating income?
contribution margin = sales revenue - variable costs
in this case, we are given the contribution margin per unit sold:
- belt A: contribution margin = $3, 18,000 units sold
- belt B: contribution margin = $2, 90,000 units sold
- belt C: contribution margin = $1, 72,000 units sold
total contribution margin = (18,000 x $3) + (90,000 x $2) + (72,000 x $1) = $54,000 + $180,000 + $72,000 = $306,000
operating income = contribution margin - period costs = $306,000 - $272,000 = $34,000
