A Company Has the Following Information for Its First Month

question 60

Multiple Choice

A company has the following information for its first month of operations: $$\begin{array} { l r } \text { Raw materials used } & \$ 25,000 \\\text { Sales } \$ 65 \text { per unit) } & \$ 78,000 \\\text { Direct labor } & \$ 42,000 \\\text { Variable factory overhead } & \$ 17,000 \\\text { Fixed factory overhead } & \text { unknown } \\\text { Variable selling and administrative } & \$ 3,000 \\\text { Fixed selling and administrative } & \$ 5,000 \\\text { Gross profit } & \$ 30,000 \\\text { Contribution margin } & \text { unknown } \\\\\text { Ending inventories: }\\\\\text { Raw materials } & \$ 7,000 \\\text { WIP } & \text { none } \\\text { Finished goods } & 1,200 \text { units }\end{array}$$ The total contribution margin under variable costing is_____.

• A)$21,000
• B)$7,000
• C)$34,500
• D)$33,000