If a firm sells 40,000 units and the contribution margin on the firm's single product is $4.00 per unit and fixed costs are $60,000, what will the firm's operating profit be at this level of sales volume?
A) $100,000
B) $30,000
C) $15,000
D) $145,000

Question

Quizplus · Accepted Answer

The operating profit can be calculated by first finding the total contribution margin (40,000 units * $4.00 per unit = $160,000) and then subtracting the fixed costs ($60,000) from this amount, which results in an operating profit of $100,000.

If a Firm Sells 40,000 Units and the Contribution Margin