Question

g Based on a predicted level of production and sales of 22,000 units, a company anticipates total variable costs of $99,000, fixed costs of $30,000, and operating income of $36,000. Based on this information, the budgeted amount of contribution margin for 20,000 units would be:

Answer 1

Answer:

Total contribution margin= $60,000

Explanation:

First, we need to calculate the actual contribution margin:

Contribution margin= net income + fixed costs

Contribution margin= 36,000 + 30,000= $66,000

Now, the unitary contribution margin:

Unitary contribution margin= 66,000/22,000= $3

Finally, the total contribution margin for 20,000 units:

Total contribution margin= 3*20,000= $60,000