Question

Suppose Revenues are $534,811 Cost of Goods sold, representing the cost of products sold, is made up of $57,612 of fixed costs and $84,276 of variable costs. Period expenses (sales, marketing and administrative expenses) are made up of $30000 of variable costs and $50000 in fixed costs. Prepare a contribution margin income statement. What is Total Contribution Margin that would appear on the statement?

Answer 1

Total Contribution margin = $420,535

Step-by-step explanation:

given data

Sales revenue = $534,811

variable cost = $84,276 + $30000

variable cost = $114,276

so Contribution margin is

Contribution margin = Sales revenue - variable cost

Contribution margin = $534,811 - $114,276

Contribution margin = $420,535

and

Fixed cost is =$57,612 + $50000

Fixed cost is = $107612

so

Net operating income = Contribution margin - Fixed cost is

Net operating income = $420,535 - $107612

Net operating income = $312923

and

Total Contribution margin = $420,535