Callander Corporation Is a Wholesaler That Sells a Single Product

question 324

Multiple Choice

Callander 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 $140.50 per unit. The best estimate of the total contribution margin when 6,300 units are sold is: (Round your intermediate calculations to 2 decimal places.)

• A) $75,600
• B) $97,650
• C) $362,880
• D) $229,950

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Definitions:

Variable Manufacturing Costs

Charges that fluctuate based on the volume of production, like components used in product assembly and wages for workers on the production line.

Variable Selling Expenses

Selling costs that fluctuate with sales volume, such as commissions for sales staff.

Break-Even Sales

The amount of revenue required to cover all fixed and variable expenses, resulting in zero profit.

Variable Expenses

Expenses that vary directly with the level of production or sales, such as raw materials and direct labor costs.