Question

XYZ Co. reported the following results for October: Sales $ 32,000 Cost of goods sold (all variable) $ 6,000 Total variable selling expense $ 2,500 Total fixed selling expense $ 4,700 Total variable administrative expense $ 1,800 Total fixed administrative expense $ 3,000 The contribution margin for October is:

Answer 1

See below

Step-by-step explanation:

Given the information above,

Contribution margin = Sales - Variable expenses

Sales = $32,000

Variable expenses = Total variable selling expenses + Total variable administrative expenses

= $2,500 + $1,800

= $4,300

Therefore,

Contribution margin = $32,000 - $4,300

Contribution margin = $27,700

Therefore, the contribution margin for October is $27,700