Atwood Dairy Bar Sells Its Famous Soft-Serve Ice Cream Cones

question 345

Multiple Choice

Atwood Dairy Bar sells its famous soft-serve ice cream cones near a marina and resort area. The owner, Theresa, wants to determine the cost behaviour patterns to help planning for the next summer season. She has the following information available about the operating costs and the number of soft-serve cones served.

Theresa uses the high-low method to determine the operating cost equation and sells 8,000 cones in a month for $2.00 each.
-What would the contribution margin be at Atwood Dairy Bar if the owner prepared a contribution margin income statement for that month?

• A) $14,000
• B) $16,000
• C) $2,000
• D) $18,000

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