If a company expects to sell 1,000 units at a selling price of $250 each and has variable costs of $150 per unit, what is the total contribution?

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Q: If a company expects to sell 1,000 units at a selling price of $250 each and has variable costs of $150 per unit, what is the total contribution?

Solution: Total Contribution = (Selling Price - Variable Costs) * Number of Units = ($250 - $150) * 1,000 = $100,000.

Steps: 7

Step 1: Identify the selling price per unit, which is $250.
Step 2: Identify the variable cost per unit, which is $150.
Step 3: Calculate the contribution per unit by subtracting the variable cost from the selling price: $250 - $150.
Step 4: The result of the calculation in Step 3 is $100, which is the contribution per unit.
Step 5: Identify the total number of units expected to be sold, which is 1,000 units.
Step 6: Calculate the total contribution by multiplying the contribution per unit by the number of units: $100 * 1,000.
Step 7: The result of the calculation in Step 6 is $100,000, which is the total contribution.