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A company's flexible budget for 12,000 units of production showed sales, $48,000; variable costs, $18,000; and fixed costs, $16,000. The contribution margin expected if the company produces and sells 16,000 units is:

Respuesta :

Answer:

$40,000

Explanation:

The computation is shown below:

As we know that

Contribution margin = Sales - variable cost

And,

Contribution margin per unit = Selling price per unit - variable cost per unit

where,

Selling price per units is

= $48,000 ÷ 12,000 units

= $4

And, the variable cost per unit is

= $18,000 ÷ 12,000 units

= $1.5

So, the contribution margin per unit is

= $4 - $1.5

= $2.5

And, the contribution margin is

= 16,000 units × $2.5

= $40,000

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