If the company sells 3,100 units, its total contribution margin should be closest to: 
A. $27,045
B. $181,000
C. $162,400
D. $173,600
Discussion: Contribution Margin per unit = 162,400/2900 = 56. So if there are 3100 units sold,
then contribution margin = 3100 * 56=173,600

6. Rothe Company manufactures and sells a single product that it sells for $90 per unit and has a
contribution margin ratio of 35%. The company's fixed expenses are $46,800. If Rothe desires a monthly
target net operating income equal to 15% of sales, the amount of sales in units will have to be
(rounded): 
A. 1,486 units
B. 3,467 units
C. 1,040 units
D. 2,600 units
Discussion: The equations set up from this problem are the following:
Net Operating income = contribution margin – fixed expenses
Net Operating Income = 35%*90*sales in units – 46800.
Net Operating Income = 15% * 90* sales in units
So setting these equal and solving
35%*90*sales in units -46800=15%*90*sales in units
31.5 sales in units – 46800=13.5*sales in units
18 sales in units = 46800
Sales in units = 2600

7.Darth Company sells three products. Sales and contribution margin ratios for the three products
follow:

   

Given these data, the contribution margin ratio for the company as a whole would be: 
A. 25%
B. 75%
C. 33.3%
D. it is impossible to determine from the data given.
Discussion: Contribution margin for company as a whole = Total Contribution Margin / Total
Sales