The Following Income Statement Is Provided for Ramirez Company for the Current

The following income statement is provided for Ramirez Company for the current year: $\begin{array}{|l|r|}\hline \text { Sales revenue }(2,500 \text { units } x \$ 40 \text { per unit }) & \$ \quad 100,000\\\hline \text { Cost of goods sold (varable; } 2,500 \text { units x } \$ 16 \text { per unit) } & (40,000) \\\hline \text { Cost of goods sold (fixed) } & (8,000) \\\hline \text { Gross margin } & 52,000 \\\hline \text { Administrative salaries } & (12,000) \\\hline \text { Depreciation } & (8,000) \\\hline\text { Supplies }(2,500 \text { units x } \$ 4 \text { per unit) } & (10,000) \\\hline \text { Net income } &\$ \quad 22,000\\\hline\end{array}$ What amount was the company's contribution margin?

A) $50,000
B) $22,000
C) $52,000
D) $60,000

Correct Answer:

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