Calculation of total contribution margin

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Reference no: EM1314726

Calculation of total contribution margin and variable costs analysis

1. Iacono Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $127.20 per unit.

The best estimate of the total contribution margin when 5,300 units are sold is:

a. $32,330

b. $230,020

c. $51,410

d. $146,810

2. Shipping cost at Junk Food Imports is a mixed cost with variable and fixed components. Past records indicate total shipping cost was $18,000 for 16,000 pounds shipped and $22,500 for 22,000 pounds shipped. Assuming that this activity is within the relevant range, if the company plans to ship 18,000 pounds next month, the expected shipping cost is:

a. $18,500

b. $20,400

c. $19,500

d. $24,000

Reference no: EM1314726

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