Question

The following information for the past year for the Blaine Corporation has been provided: Fixed costs: ​ Manufacturing $100,000​ Marketing 22,000​ Administrative 18,000​ Variable costs: ​ Manufacturing $114,000​ Marketing 31,000​ Administrative 40,000​During the year, the company produced and sold 40,000 units of product at a selling price of $14.43 per unit. There was no beginning inventory of product at the beginning of the year. What is the contribution margin for the year

Answer 1

The contribution margin for the year is $463,200.

Step-by-step explanation:

Contribution margin is the amount by which sales revenue exceeds variable costs. Variable costs are more tied to the development of the product and is greatly affected by the number of products sold. Examples of variable costs are labor and materials.

Sales revenue

40,000 units * $ 14.43 = $577,200

Variable costs

$114,000

Contribution margin

$577,200 - $114,000 = $463,200