Sorin Incorporated, a company that produces and sells a single product, has provided its contribution format income statement for January. Sales (3,600 units) $108,000
Variable expenses 49,680
Contribution margin 58,320
Fixed expenses 44,300
Net operating income $14,020

If the company sells 4,600 units, its total contribution margin should be closest to:

a. $54,600
b. $59,800
c. $69,400
d. $13,362

In the short-run, marginal costs are equal to the change in variable costs as output changes. ( mc = change in variable cost / change in quantity) assume that capital is fixed in the short-run. (a) start with the equation for marginal cost and derive an equation that relates marginal cost of production to the cost and productivity of labor. (b) draw a standard looking short-run marginal cost curve and use the equation you derived to explain its shape.