Brees Inc., a company that produces and sells a single product, has provided its contribution format income statement for April. If the company sells 5,800 units, its total contribution margin should be closest to:
A)$55,800
B)$52,200
C)$6,642
D)$47,000

Question

Brees Inc., a company that produces and sells a single product, has provided its contribution format income statement for April.  If the company sells 5,800 units, its total contribution margin should be closest to:
A)$55,800 
B)$52,200 
C)$6,642 
D)$47,000

Quizplus · Accepted Answer

To calculate the total contribution margin, we need to multiply the contribution margin per unit by the number of units sold.

Contribution margin per unit = Selling price per unit - Variable expenses per unit 
= $27 - $9 
= $18

Total contribution margin = Contribution margin per unit x Number of units sold 
= $18 x 5,800 
= $104,400

Therefore, the closest option to the total contribution margin would be option B) $52,200.

Brees Inc, a Company That Produces and Sells a Single Product