Martin Company currently produces and sells 40,000 units of product at a selling price of $12. The product has variable costs of $6 per unit and fixed costs of $150,000. The company currently earns a total contribution margin of: . a. $280,000
b. $200,000
c. $240,000
d. $90,000

Total contribution margin = $240,000---c

Explanation:

Contribution margin is the revenue left after removing  the variable costs that are incurred in producing a product. This  margin helps one to know how profitability each  item is  that a company produces and  puts up for sale.

It is calculated as

 Contribution per unit = selling price per unit - variable costs per unit.

$12-$6 = $6

Total contribution margin = Contribution per unit x number of units sold.

$6 x 40,000 units

=  $240,000

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