Answer:
Hence, the manufacturing margin for Part A is $1,400,000
Therefore, the correct option is B i.e $1,400,000
Explanation:
The manufacturing margin is somewhat same like contribution margin. SO, here we applying the formula of contribution margin.
For computing the manufacturing margin for Part A, the calculation is shown below.
Manufacturing margin = (Selling Price per unit × Number of units) - (Variable manufacturing cost per unit × Number of units)
= (5,000 × $800) - ($5000 × $520)
= $4,000,000 - $2,600,000
= $1,400,000
Hence, the manufacturing margin for Part A is $1,400,000
Therefore, the correct option is B i.e $1,400,000
