Schrute Farm Sales buys portable generators for $460 and sells them for $750. He pays a sales commission of 5% of sales revenue to his sales staff. Mr. Schrute pays $7000 a month rent for his store, and also pays $1800 a month to his staff in addition to the commissions. Mr. Schrute sold 300 generators in June. If Mr. Schrute prepares a contribution margin income statement for the month of June, what would be his contribution margin?

Question

Business

Jermaine Doyle

6 July, 16:20

Schrute Farm Sales buys portable generators for $460 and sells them for $750. He pays a sales commission of 5% of sales revenue to his sales staff. Mr. Schrute pays $7000 a month rent for his store, and also pays $1800 a month to his staff in addition to the commissions. Mr. Schrute sold 300 generators in June. If Mr. Schrute prepares a contribution margin income statement for the month of June, what would be his contribution margin?

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Answers (1)

Know the Answer?

Enrique Sanford · Answer 1

his contribution margin is $75750

Explanation:

given data

buys = $460

sell = $750

sales commission = 5%

store rent = $7000

pay for staff = $1800

to find out

what would be his contribution margin

solution

contribution margin is express as

contribution margin = sales - sales commission - cost of good sold ... 1

put here value

contribution margin = 300 * 750 - (300 * 750) 5% - 300 * 460

contribution margin = 75750

so his contribution margin is $75750