What is the maximum contribution margin the company can earn per month?
A)$94,088
B)$66,080
C)$67,547
D)$69,192

Question

Quizplus · Accepted Answer

The maximum contribution margin can be calculated as follows:
Contribution margin = Total revenue - Total variable costs
Contribution margin = ($184,000 x 0.25) + ($168,000 x 0.45) + ($80,000 x 0.65)
Contribution margin = $46,000 + $75,600 + $52,000
Contribution margin = $173,600

Therefore, the maximum contribution margin the company can earn per month is $173,600, which is closest to option D ($69,192).

What Is the Maximum Contribution Margin the Company Can Earn