Answered

Welcome to Westonci.ca, your go-to destination for finding answers to all your questions. Join our expert community today! Connect with professionals on our platform to receive accurate answers to your questions quickly and efficiently. Discover detailed answers to your questions from a wide network of experts on our comprehensive Q&A platform.

The following information exists for ABC Company:

Selling price per unit: $30
Variable expenses per unit: $21
Fixed expenses for the period: $60,000
Sales volume in units: 10,000

If selling price is reduced by $2 and sales volume increases by 3,000 units, total contribution margin will increase by $__________ .

Sagot :

facundobuzzetti

Answer:

Difference= $1,000 increase

Explanation:

Giving the following information:

Selling price per unit: $30

Variable expenses per unit: $21

New selling price= 30 - 2= $28

New units sales= 13,000

First, we need to calculate the current contribution margin:

Total contribution margin= units sold*unitary contribution margin

Total contribution margin= 10,000*(30 - 21)

Total contribution margin= $90,000

Now, the new contribution margin:

Total contribution margin= 13,000*(28 - 21)

Total contribution margin= $91,000

We hope you found this helpful. Feel free to come back anytime for more accurate answers and updated information. Your visit means a lot to us. Don't hesitate to return for more reliable answers to any questions you may have. Thank you for using Westonci.ca. Come back for more in-depth answers to all your queries.