Grisham Corporation produces and sells a single product. The company has provided its contribution format income statement for February. If the company sells 5,900 units, its total contribution margin should be closest to:
A)$148,000
B)$128,800
C)$135,700
D)$21,493

Question

Grisham Corporation produces and sells a single product. The company has provided its contribution format income statement for February.  If the company sells 5,900 units, its total contribution margin should be closest to:
A)$148,000 
B)$128,800 
C)$135,700 
D)$21,493

Quizplus · Accepted Answer

To find the total contribution margin when 5,900 units are sold, we need to multiply the contribution margin per unit by the number of units sold. In the given income statement, the contribution margin per unit is $23. So,

Total Contribution Margin = Contribution Margin per unit x Number of units sold
Total Contribution Margin = $23 x 5,900
Total Contribution Margin = $135,700

Therefore, the closest option to the total contribution margin for selling 5,900 units is C) $135,700.

Grisham Corporation Produces and Sells a Single Product