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12 November, 09:02

During its most recent fiscal year, Dover, Inc. had total sales of $3,200,000. Contribution margin amounted to $1,500,000 and pretax income was $400,000. What amount should have been reported as variable costs in the company's contribution margin income statement for the year in question?

$1,900,000.

$2,800,000.

$1,300,000.

$1,100,000.

$1,700,000.

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Answers (1)
  1. 12 November, 12:30
    0
    variable cost = $1,700,000

    Explanation:

    given data

    total sales = $3,200,000

    Contribution margin = $1,500,000

    pretax income = $400,000

    to find out

    variable costs in the company's contribution margin income statement

    solution

    we know that contribution margin is express as

    contribution margin = total sales - variable cost ... 1

    put here value and we get variable cost

    variable cost = $3,200,000 - $1,500,000

    variable cost = $1,700,000
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