Question

Nikkel Corporation, a merchandising company, reported the following results for July:

Sales $433,000
Cost of goods sold (all variable) $174,800
Total variable selling expense $25,600
Total fixed selling expense $15,100
Total variable administrative expense $14,800
Total fixed administrative expense $31,400

The contribution margin for July is:
1) $217,800
2) $258,200
3) $171,300
4) $386,500

Answer 1

The contribution margin for July is $217,800.

Step-by-step explanation:

The contribution margin for July is $217,800.

The contribution margin can be calculated by subtracting the total variable expenses from the sales revenue. In this case, the total variable expenses include the cost of goods sold, total variable selling expense, and total variable administrative expense.

Contribution Margin = Sales - Total Variable Expenses

= $433,000 - ($174,800 + $25,600 + $14,800)

= $217,800