Answer the following questions using the information below:
Tally Corp. sells softwares during the recruiting seasons. During the current year, 11,000 softwares were sold resulting in $440,000 of sales revenue, $110,000 of variable costs, and $48,000 of fixed costs.
-Contribution margin per software is ________.
A) $10.00
B) $30.00
C) $40.00
D) $36.00

Question

Quizplus · Accepted Answer

Contribution margin per software = Sales revenue per software - Variable costs per software
Sales revenue per software = Total sales revenue / Total number of softwares sold 
                         = $440,000 / 11,000 
                         = $40
Variable costs per software = Total variable costs / Total number of softwares sold 
                            = $110,000 / 11,000 
                            = $10
Contribution margin per software = $40 - $10 
                                  = $30 
Therefore, the contribution margin per software is $30.

The best choice is B as it is the only option that correctly calculates the contribution margin using the given information.

Answer the Following Questions Using the Information Below