In the last reporting period, Helena's Heavenly Fixture Company recorded 100,000 units sold for the first time in the history of the company

Accounting Mar 01, 2021

In the last reporting period, Helena's Heavenly Fixture Company recorded 100,000 units sold for the first time in the history of the company. The price per unit was $89.99 and variable costs per unit at $36.39. Showing all work in the space provided, compute the contribution margin. Next, compute the fixed costs if the operating income is $4,020,000.

A) $5,360,000; $1,340,000

B) $5,500,000; $1,360,000

C) $5,575,000; $1,375,000

D) $5,600,000; $1,425,000

Expert Solution

Answer: A

Explanation: A)

$89.99 - $36.39 = $53.60

$53.60 × $100,000 = $5,360,000

$5,360,000 - $4,020,000 = $1,340,000

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