If Total Sales Are $460,000, Total Variable Costs Are $138,000

question 22

Multiple Choice

If total sales are $460,000, total variable costs are $138,000, and total fixed costs are $184,000, the contribution margin is:

• A) $460,000
• B) $184,000
• C) $276,000
• D) $322,000

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Definitions:

Net Operating Income

The profit a company makes from its core business operations, excluding deductions of interest and taxes.

Operating Loss

A loss incurred when a company's operating expenses exceed its gross profits or revenues, indicating that the core operations are not profitable.

Absorption Costing

Absorption Costing is an accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed manufacturing overhead) in the cost of a product.

Unit Product Cost

The total cost (both fixed and variable) associated with a product, divided by the number of units produced.