Question

Nikkel Corporation, a merchandising company, reported the following results for July: Sales $406,000 Cost of goods sold (all variable) $175,800 Total variable selling expense $25,200 Total fixed selling expense $16,100 Total variable administrative expense $12,700 Total fixed administrative expense $33,000 The contribution margin for July is:________.

Answer 1

The contribution margin for July is $192,300

Step-by-step explanation:

The contribution margin is calculated by using following formula:

Contribution margin = Total sales – Total variable costs

In Nikkel Corporation,

Total sales = $406,000

Total variable costs = Cost of goods sold + Total variable selling expense + Total variable administrative expense = $175,800 + $25,200 + $12,700 = $213,700

Contribution margin = $406,000 - $213,700 = $192,300