Monica has found that her contribution margin per hour of time for her highest selling product is $2,500. she wants to dedicate an extra 40 hours a month to this product, but she needs to know the increase in total contribution margin if she does this. the product generally sells for $100 a unit. what would be the increase in total contribution margin for this product?
$62,500
$100,000
$160,000
$78,300

The increase in total contribution margin for this product is $100,000

Explanation:

Contribution margin = Sales - variable cost

It is a difference between sales and variable cost per unit or dollar amount

In the question, the contribution margin per hour and extra hours is given which help to compute the increase in the total contribution margin. The computation is shown below:

= Contribution margin per hour × Extra hours

= $2,500 × 40 hours

= $100,000

The general sale cost should not be taken in the computation part because it is an irrelevant.

Hence, the increase in total contribution margin for this product is $100,000

answermarketing metrics;

answer(b) equal; set period;