Delos, Inc. reports the following information for April: $$\begin{array} { | l | r | r | }
\hline & \text { Sigma } & \text { Gamma } \
\hline \text { Units sold } & 2000 \text { units } & 750 \text { units } \
\hline \text { Sales price per unit } & \$ 350 & \$ 700 \
\hline \text { Variable manufacturing cost per unit } & 175 & 500 \
\hline \text { Sales commission per unit: } & & \
\hline \text { Sigma: } 8 \% \text { of sales price } & 28 & \
\hline \text { Gamma: } 8 \% \text { of sales price } & & 56 \
\hline
\end{array}$$ What is the contribution margin of Sigma?
A) $119,000
B) $644,000
C) $350,000
D) $294,000

Question

Delos, Inc. reports the following information for April: $$\begin{array} { | l | r | r | } 
\hline & \text { Sigma } & \text { Gamma } \
\hline \text { Units sold } & 2000 \text { units } & 750 \text { units } \
\hline \text { Sales price per unit } & \$ 350 & \$ 700 \
\hline \text { Variable manufacturing cost per unit } & 175 & 500 \
\hline \text { Sales commission per unit: } & & \
\hline \text { Sigma: } 8 \% \text { of sales price } & 28 & \
\hline \text { Gamma: } 8 \% \text { of sales price } & & 56 \
\hline
\end{array}$$ What is the contribution margin of Sigma?
A) $119,000
B) $644,000
C) $350,000
D) $294,000

Quizplus · Accepted Answer

The contribution margin for Sigma is calculated as follows: Sales revenue minus variable costs (both manufacturing and sales commission). For Sigma, sales revenue is $2000 \times \$350 = \$700,000$. The variable manufacturing cost is $2000 \times \$175 = \$350,000$, and the sales commission is $2000 \times \$28 = \$56,000$. Thus, the total variable costs are $\$350,000 + \$56,000 = \$406,000$. The contribution margin is therefore $\$700,000 - \$406,000 = \$294,000$.

Delos, Inc What Is the Contribution Margin of Sigma? A) $119,000 B)

Delos, Inc What Is the Contribution Margin of Sigma?
A) $119,000
B)