The following information pertains to the East Division of Saturn Company: Variable costs:
Fixed costs:
The contribution margin is ________.
A)$7,100
B)$7,700
C)$8,000
D)$8,700

Question

The following information pertains to the East Division of Saturn Company:  Variable costs:
 Fixed costs:
 The contribution margin is ________.
A)$7,100 
B)$7,700 
C)$8,000 
D)$8,700

Quizplus · Accepted Answer

The contribution margin is the difference between sales revenue and variable costs. However, no numbers are given in the question for sales revenue, and so it cannot be calculated. Furthermore, the fixed costs are also not provided, so we cannot calculate the break-even point for this division. However, we can still find the contribution margin per unit or per percentage of sales. Unfortunately, there is not enough information given to calculate either of these. Therefore, the only option is to choose answer choice C, which is the highest value listed.

The Following Information Pertains to the East Division of Saturn