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3 June, 15:11

The company produced 7,771 units and sold 2,111 units for $628 each. Variable manufacturing costs were 352 per unit. Fixed manufacturing costs were $4,969. Variable selling and administrative costs were $24 per unit sold and fixed selling and administrative costs were $2,811. There was no beginning inventory. What is the contribution margin? As always, no $ and commas.

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  1. 3 June, 18:03
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    The contribution margin is 531 972

    Explanation:

    Computation of contribution margin

    The contribution margin is revenues - Variable costs

    Sales Revenue (2 111 * 628) 1 325 708

    Variable manufacturing costs (2 111 * 352) 743 072

    Variable Selling and Administrative costs (2 111 * 24) 50 664

    Contribution Margin 531 972

    All costs of a fixed nature in manufacturing or selling and administrative expenses are not considered in determining the contribution margin
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