Latinovich Company has no beginning and ending inventories, and reports the foll

Question

Latinovich Company has no beginning and ending inventories, and reports the following data about its only product:

Direct materials used                                             $200,000

Direct labor                                                                  $80,000

Fixed indirect manufacturing                              $180,000

Fixed selling and administrative                        $150,000

Variable indirect manufacturing                        $130,000

Variable selling and administrative                  $160,000

Selling price(per unit)                                                     $150

Units produced and sold                                           10,000

Latinovich Company uses the contribution approach to prepare the income statement. What is the contribution margin?

A) $600,000

B) $910,000

C) $930,000

D) $1,090,000

Explanation / Answer

Answer is C

Particulars Amt Sales (10000 x 150)    1,500,000.00 Less: Direct materials used        200,000.00 Direct labor          80,000.00 Variable indirect manufacturing        130,000.00 Variable selling and administrative        160,000.00 Contribution Margin        930,000.00

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