Department A in a company had sales of $60,000 in the year 2007. Variables costs of sales was $30,000 and variable selling expenses were $9,000. Fixed administrative expenses were $5000. What is the contribution margin?
A) $60,000
B) $39,000
C) $21,000
D) $30,000
E) $16,000

Question

Quizplus · Accepted Answer

The contribution margin is calculated as sales minus variable costs. Here, the variable costs include both the variable costs of sales ($30,000) and variable selling expenses ($9,000), totaling $39,000. Therefore, the contribution margin is $60,000 - $39,000 = $21,000.

Department a in a Company Had Sales of $60,000 in the Year