Fletcher Company has three products with the following characteristics:
$\begin{array} { | l | r | r | r | }
\hline & \text { Product A } & \text { Product B } & \text { Product C } \
\hline \begin{array} { l }
\text { Monthly sales in } \
\text { dollars }
\end{array} & \$ 60,000 & \$ 80,000 & \$ 100,000 \
\hline \begin{array} { l }
\text { Contribution margin } \
\text { ratio }
\end{array} & 20 \% & 40 \% & 16 \% \
\hline
\end{array}$Fixed Costs = $30,000 per month.

-Assume sales next year total $240,000; product A $70,000,product B $90,000 and C $80,000.Total Contribution Margin for Fletcher will be closest to:
A) $60,000.
B) $62,800.
C) $32,800.
D) $30,000.

Question

Fletcher Company has three products with the following characteristics:
$\begin{array} { | l | r | r | r | } 
\hline & \text { Product A } & \text { Product B } & \text { Product C } \
\hline \begin{array} { l } 
\text { Monthly sales in } \
\text { dollars }
\end{array} & \$ 60,000 & \$ 80,000 & \$ 100,000 \
\hline \begin{array} { l } 
\text { Contribution margin } \
\text { ratio }
\end{array} & 20 \% & 40 \% & 16 \% \
\hline
\end{array}$Fixed Costs = $30,000 per month.

-Assume sales next year total $240,000; product A $70,000,product B $90,000 and C $80,000.Total Contribution Margin for Fletcher will be closest to:
A) $60,000.
B) $62,800.
C) $32,800.
D) $30,000.

Quizplus · Accepted Answer

To calculate the total contribution margin for Fletcher, we multiply the sales of each product by its contribution margin ratio:- Product A: $70,000 * 20% = $14,000- Product B: $90,000 * 40% = $36,000- Product C: $80,000 * 16% = $12,800Adding these together gives us the total contribution margin: $14,000 + $36,000 + $12,800 = $62,800.

Fletcher Company Has Three Products with the Following Characteristics Fixed Costs = $30,000 Per Month