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The employees at Mobile Sun Lotion Company roam the beaches with a tank of premium suntan lotion strapped on their backs. For a $2 charge, the employees will spray sunbathers with suntan lotion. Last year, Mobile sprayed 250,000 customers and incurred the following costs:

Total variable costs $175,000
Total fixed costs 50,000
Total costs $225,000

Assuming that this activity is within the relevant range, what would Mobile's total contribution margin have been last year if only 240,000 customers were sprayed?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M985219

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