Delos, Inc. reports the following information for April: Sigma Gamma Units sold 2 comma 000 units 800 units Sales price per unit $ 350 $ 800 Variable manufacturing cost per unit 175 460 Sales commission per unit: Sigma: 4 % of sales price 14 Gamma: 6 % of sales price 48 What is the contribution margin of Sigma? A. $ 262 comma 000 B. $ 350 comma 000 C. $ 672 comma 000 D. $ 322 comma 000

Question

Business

Alfredo

23 February, 16:10

Delos, Inc. reports the following information for April: Sigma Gamma Units sold 2 comma 000 units 800 units Sales price per unit $ 350 $ 800 Variable manufacturing cost per unit 175 460 Sales commission per unit: Sigma: 4 % of sales price 14 Gamma: 6 % of sales price 48 What is the contribution margin of Sigma? A. $ 262 comma 000 B. $ 350 comma 000 C. $ 672 comma 000 D. $ 322 comma 000

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Answers (1)

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Kenneth Lam · Answer 1

D. $ 322,000

Explanation:

Delos, Inc.

Contribution margin format income statement

For sigma

Sales revenue (2,000 units * $350) = $700,000

Less: variable manufacturing cost = (2,000 units * $175) = ($350,000)

Less: sales commission = (700,000 * 4%) = ($28,000)

Contribution margin for sigma = $700,000 - $350,000 - $28,000

Contribution margin = $322,000

Therefore, option D is correct.