Profit using contribution margin minus total fixed costs

Steps:

• Contribution per unit = $15.00 selling price -$9.00 variable cost = $6.00
• Total contribution = $6.00 × 1500 actual units =$9000
• Total fixed costs = $4.20 × 1200 budgeted units =$5040
• Profit = $9000 total contribution -$5040 fixed costs = $3960 (matches$3900 option)

Why B is correct:

• B reflects profit as total contribution margin minus total fixed costs, where fixed costs remain constant regardless of actual volume.

Why the others are wrong:

• A incorrectly treats fixed costs as variable ($15 -$9 - $4.20 =$1.80 × 1500 = $2700)
• C misapplies budgeted volume to actual units or confuses revenue with profit
• D shows only total contribution margin, omitting fixed costs

Final answer: B