Question

Scuffy has the following product information. Sales price $7.50 per unit Variable cost $2.25 per unit Fixed cost $10,000 Units sold 20,000 What is total contribution margin?

Answer 1

The total contribution margin is $105,000.

Step-by-step explanation:

To calculate the total contribution margin, we need to subtract the variable cost per unit from the sales price per unit and then multiply by the number of units sold.

Total contribution margin = (Sales price per unit - Variable cost per unit) x Units sold
= ($7.50 - $2.25) x 20,000
= $5.25 x 20,000
= $105,000