Data from Rannier Metals for 2017 is as follows: $\begin{array}{lr}
\text { Sales } & \$ 20 \text { per unit } \
\text { Variable cost of goods sold } & ? ? \
\text { Fixed manufacturing overhead } & \$ 85,000 \
\text { Variable selling \& administrative costs } & ? ? \
\text { Fixed selling \& administrative costs } & \$ 150,000
\end{array}$ The company produced 145,000 units during the year and sold 130,000 units.Variable production costs per unit and fixed costs have remained constant all year.Net income for the year was $1,000,000.How much was the company's contribution margin?
A)$765,000
B)$1,235,000
C)$1,365,000
D)Not enough information is provided to determine the answer

Question

Quizplus · Accepted Answer

The contribution margin is calculated as Sales - Variable Costs. Given that net income is $1,000,000 and fixed costs total $235,000 ($85,000 + $150,000), the contribution margin must be $1,235,000 to cover fixed costs and achieve the net income.

Data from Rannier Metals for 2017 Is as Follows The Company Produced 145,000 Units During the Year and Sold