Marginal Costing Profit Calculation Steps:

• Sales revenue = 125 batches × $12 =$1,500
• Total variable costs = 125 batches × $4 =$500
• Contribution = $1,500 -$500 = $1,000
• Profit = contribution - total fixed costs ($300) =$700 Why C is correct:
• Marginal costing defines profit as total contribution (sales minus variable costs) less total fixed costs, yielding $700 here. Why the others are wrong:
• A. $500: Ignores variable costs, subtracting fixed from sales only.
• B. $25: Likely uses absorption costing with fixed costs per unit, incorrectly allocating$300 over 125 batches.
• D. $1000: Omits fixed costs, equating profit to contribution alone.

Final answer: C