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Riverton Corp., which began business at the start of the current year, had the following data: Planned and actual production: 40,000 units Sales: 37,000 units at $15 per unit
Production costs: Variable: $4 per unit
Fixed: $260,000
Selling and administrative costs:
Variable: $1 per unit
Fixed: $32,000 The contribution margin that the company would disclose on a variable-costing income statement is:________.
a. None of the answers is correct.
b. $166,500.
c. $97,500.
d. $370,000.
e. $147,000.

Sagot :

ayokenny2001

Answer:

B. $166,500

Explanation:

Given the above information, we'll calculate fixed cost per unit.

Fixed cost per unit

= $260,000 ÷ 40,000 units

= $6.5 per unit

Then,

Sales per units

= Variable cost per unit - Fixed costs per units

= $15 - $4 - $6.5

= $4.5

Contribution margin

= $4.5 × 37,000

= $166,500

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