Reference no: EM132610799

Schaefer Company has no beginning and ending inventories, and reports the following data about its only product:

Direct materials used            $200,000

Direct labor                       $80,000

Fixed indirect manufacturing   $100,000

Fixed selling and administrative $150,000

Variable indirect manufacturing $20,000

Variable selling and administrative $60,000

Selling price(per unit)                 $50

Units produced and sold                10,000

Question 1: Schaefer Company uses the contribution approach to prepare the income statement. What is the contribution margin?

Group of answer choices

Option 1: $100,000

Option 2: $140,000

Option 3: $200,000

Option 4: $220,000