Marginal Costing Profit Calculation Steps:

• Calculate sales revenue: 2000 units × $50 =$100,000
• Calculate total variable costs: 2000 units × $16 =$32,000
• Calculate contribution: $100,000 -$32,000 = $68,000
• Calculate total fixed costs: normal activity 1000 units × $4 =$4,000
• Profit = contribution - fixed costs = $68,000 -$4,000 = $64,000

Why C is correct:

• Marginal costing treats fixed costs as period costs, so profit = total contribution ($68,000) minus total fixed costs ($4,000) = $64,000.

Why the others are wrong:

• A. $32,000: Equals total variable costs, ignoring contribution and fixed costs.
• B. $6,000: Likely absorption costing profit, which allocates fixed costs per unit and understates profit at high volume.
• D. $8,000: Equals double fixed costs (2000 ×$4/2 error), misapplying per-unit fixed rate.

Final answer: C