McDaniel Inc., a company that produces and sells a single product, hasprovided its contribution format income statement for January.Sales (4,200 units)Variable expensesContribution marginHFixed expensesNet operating income$54,600$59,800$69,400$O $13,362$155,400100,800If the company sells 4,600 units, its total contribution margin should beclosest to:54,60042,40012,200

Answered: Sales (4,200 units) Variable expenses…

Business

Accounting

Sales (4,200 units) Variable expenses Contribution margin $ 155,400 100,800 54,600

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

McDaniel Inc., a company that produces and sells a single product, has
provided its contribution format income statement for January.
Sales (4,200 units)
Variable expenses
Contribution margin
H
Fixed expenses
Net operating income
$54,600
$59,800
$69,400
$
O $13,362
$
155,400
100,800
If the company sells 4,600 units, its total contribution margin should be
closest to:
54,600
42,400
12,200

Expert Solution

Step 1

Solution :

Contribution margin is the margin that arrives at by reducing variable costs from sales. Contribution margin per unit remains constant. In this case firstly we need to compute Contribution margin per unit and then total Contribution margin.

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