The Best Estimate of the Total Contribution Margin When 5,300

question 18

Multiple Choice

The best estimate of the total contribution margin when 5,300 units are sold is:

• A)$51,940
• B)$469,050
• C)$109,710
• D)$398,560

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Definitions:

Variable Costing

A costing method that includes only variable production costs—direct materials, direct labor, and variable manufacturing overhead—in product cost.

Net Operating Income

A company's revenue minus its direct costs and operating expenses, indicating the profitability from regular operations before interest and taxes.

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed manufacturing overhead) in the price of a product.

Net Operating Income

The profit generated from a business's normal core operations, excluding deductions of interest and taxes.