The Kenosha Company has three product lines of beer mugs—A, B, and C—with contribution margins of $5, $4, and $3, respectively. The president foresees sales of 175,000 units in the coming period, consisting of 25,000 units of A, 100,000 units of B, and 50,000 units of C. The company’s fixed costs for the period are $351,000. Q. If the sales mix is maintained, what is the total contribution margin when 175,000 units are sold? What is the operating income?

Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter10: Cost Analysis For Management Decision Making
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The Kenosha Company has three product lines of beer mugs—A, B, and C—with contribution margins of $5, $4, and $3, respectively. The president foresees sales of 175,000 units in the coming period, consisting of 25,000 units of A, 100,000 units of B, and 50,000 units of C. The company’s fixed costs for the period are $351,000.

Q. If the sales mix is maintained, what is the total contribution margin when 175,000 units are sold? What is the operating income? 

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