Question

How do I calculate the contribution margin using the income statement method? Here are the data:...

How do I calculate the contribution margin using the income statement method?

Here are the data: Cost (High/Low): 6800 & 4800; Units (High/Low): 5000 & 3500. Selling price is $3 with 4500 units sold.

Need to calculate the contribution margin. My solution gives me $7515 which are not in any of the choice answers are: $5985, $7300, $8100, $9750.

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Answer #1

Hi ,

Your solution of $7515 is correct.

It can also be approx $7500 as per my calcualtion.

I hope the choice might be $7300 due to typo error of $7500.

Please find thee attached calculation.

Thanks.

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