Reference no: EM132502278

Oil Corporation has the following financial perspective of profitability for the current month:

Revenues$10,000

Cost of Goods Sold

Direct Materials (Variable)$1,000

Direct Labor (Variable)$1,000

Variable Overhead$500

Fixed Overhead$1,500

Gross Margin$6,000

Variable Operating Expenses$1,000

Fixed Operating Expenses$3,000

Profit$2,000

• Letty, a manager at Oil Corp., has decided to adopt a managerial perspective of profitability.

Question 1: Using the provided information, which of the following statements are true about the managerial perspective? (Check all that apply.)

Option 1: Gross margin will be $6,500.

Option 2: Total variable costs will be $3,500.

Option 3: Contribution margin will be $6,500.

Option 4: Profit will be $2,000.