The following income statements are provided for Li Company's last two years of operation:

	Year 1	Year 2
Number of units produced and sold	3,500	3,000
Sales revenue	$ 101,500	$ 87,000
Cost of goods sold	68,000	60,000
Gross margin	33,500	27,000
General, selling, and administrative expenses	13,000	12,000
Net income	$ 20,500	$ 15,000

Assuming that cost behavior did not change over the two-year period, what is Li Company's contribution margin in Year 2?

Answer rating: 100% (QA)

The contribution margin is calculated as Contribution Margin Sales ... View the full answer