Vaswani Company provides the following information for their first year of operations:
Sales, 5,000 units @ $10 each; total production, 7,500 units
Selling and administrative costs.
Fixed, $1,000; Variable, $1 per unit.
Production costs per unit.
Direct materials, $2; Direct labor, $2; Variable overhead, $1
Fixed manufacturing overhead, $7,500
If Vaswani uses direct costing, how much is the contribution margin?