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Martin Company currently produces and sells 50,000 units of product at a selling price of $14. The product has variable costs of $8 per unit and fixed costs of $60,000.
The company currently earns a total contribution margin of $____.

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Answer:

Total Contribution Margin= $300,000

Explanation:

Giving the following information:

Martin Company currently produces and sells 50,000 units of a product at a selling price of $14. The product has variable costs of $8.

First, we need to calculate the unitary contribution margin:

Unitary contribution margin= selling price - unitary variable cost

Unitary contribution margin= 14 - 8= $6

Now, we can calculate the total contribution margin:

Total CM= unitary CM* number of units

Total CM= 6*50,000= $300,000

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