Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
| Selling price | $ | 94 | |
| Units in beginning inventory | 0 | ||
| Units produced | 3,900 | ||
| Units sold | 3,470 | ||
| Units in ending inventory | 430 | ||
| Variable costs per unit: | ||
| Direct materials | $ | 22 |
| Direct labor | $ | 35 |
| Variable manufacturing overhead | $ | 6 |
| Variable selling and administrative expense | $ | 3 |
| Fixed costs: | ||
| Fixed manufacturing overhead | $ | 47,900 |
| Fixed selling and administrative expense | $ | 2,700 |
The total contribution margin for the month under variable costing is:
Multiple Choice
$49,260
$107,570
$97,160
$46,560
| Sales (3,470*$94) | $ 326,180 | |
| Variable Expenses | ||
| Direct Material (3,470*$22) | $ 76,340 | |
| Direct Labour (3,470*$35) | $ 121,450 | |
| Variable manufacturing overhead (3,470*$6) | $ 20,820 | |
| Variable selling and administrative expenses (3,470*$3) | $ 10,410 | |
| Total variable cost | $ 229,020 | |
| Contribution margin | $ 97,160 |
Answer is C. $97,160
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