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A Company Has the Following Information for Its First Month

Question 60

Multiple Choice

A company has the following information for its first month of operations:  Raw materials used $25,000 Sales $65 per unit)  $78,000 Direct labor $42,000 Variable factory overhead $17,000 Fixed factory overhead  unknown  Variable selling and administrative $3,000 Fixed selling and administrative $5,000 Gross profit $30,000 Contribution margin  unknown  Ending inventories:  Raw materials $7,000 WIP  none  Finished goods 1,200 units \begin{array} { l r } \text { Raw materials used } & \$ 25,000 \\\text { Sales } \$ 65 \text { per unit) } & \$ 78,000 \\\text { Direct labor } & \$ 42,000 \\\text { Variable factory overhead } & \$ 17,000 \\\text { Fixed factory overhead } & \text { unknown } \\\text { Variable selling and administrative } & \$ 3,000 \\\text { Fixed selling and administrative } & \$ 5,000 \\\text { Gross profit } & \$ 30,000 \\\text { Contribution margin } & \text { unknown } \\\\\text { Ending inventories: }\\\\\text { Raw materials } & \$ 7,000 \\\text { WIP } & \text { none } \\\text { Finished goods } & 1,200 \text { units }\end{array} The total contribution margin under variable costing is_____.


A) $21,000
B) $7,000
C) $34,500
D) $33,000

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