Calculation of total contribution margin and variable costs

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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: EM13356660

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