Steele Corporation Has the Following Information for January, February, and March

question 3

Multiple Choice

Steele Corporation has the following information for January, February, and March:
$\begin{array}{lccc} & \text { January } & \text { February } & \text {March}\\ \text { Units produced } & 10,000 & 10,000 &10,000\\ \text { Units sold } & 7,000 & 8,500&10,500 \\\end{array}$


$\begin{array}{lr}\text { Production costs per unit (based on 10,000 units) are as follows: }\\\text { Direct materials } & \$ 12 \\\text { Direct labour } & 8 \\\text { Variable factory overhead } & 6 \\\text { Fixed factory overhead } & 4 \\\text { Variable selling and admin. expenses } & 4 \\\text { Fixed selling and admin. expenses } &\end{array}$
-Refer to the figure.What is the February contribution margin for Steele Corporation using the variable costing method?

• A)$119,000
• B)$170,000
• C)$204,000
• D)$240,000

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Definitions:

Cost-Volume-Profit Data

Information that shows how changes in cost and volume affect a company's profit, used for making short-term economic decisions.

Contribution Margin

The amount by which sales revenue exceeds variable costs, indicating how much revenue contributes towards covering fixed costs and generating profit.

Sales Price

The amount of money for which a product is sold to the customer, excluding any discounts or rebates.

Variable Cost

A cost that varies with the level of output or sales, such as raw materials or direct labor costs.