Clements Company, which has only one product, has provided the following data concerning its most recent month of operations:
-The total contribution margin for the month under the variable costing approach is:
A)$61,500
B)$51,000
C)$55,500
D)$43,600

Question

Clements Company, which has only one product, has provided the following data concerning its most recent month of operations:
-The total contribution margin for the month under the variable costing approach is:
A)$61,500 
B)$51,000 
C)$55,500 
D)$43,600

Quizplus · Accepted Answer

The contribution margin per unit is calculated as sales per unit - variable cost per unit.
Using the data from the question, the contribution margin per unit is:
$230 - $110 = $120
The total contribution margin for the month is calculated as contribution margin per unit x number of units sold.
Using the data from the question, the total contribution margin for the month is:
$120 x 462.5 = $55,500. Therefore, the correct answer is (C) $55,500.

Clements Company, Which Has Only One Product, Has Provided the Following