Question

The company produced 7,771 units and sold 2,111 units for $628 each. Variable manufacturing costs were 352 per unit. Fixed manufacturing costs were $4,969. Variable selling and administrative costs were $24 per unit sold and fixed selling and administrative costs were $2,811. There was no beginning inventory. What is the contribution margin? As always, no $ and commas.

Answer 1

The contribution margin is 531 972

Step-by-step explanation:

Computation of contribution margin

The contribution margin is revenues - Variable costs

Sales Revenue ( 2 111 * 628) 1 325 708

Variable manufacturing costs ( 2 111 * 352) 743 072

Variable Selling and Administrative costs ( 2 111 * 24) 50 664

Contribution Margin 531 972

All costs of a fixed nature in manufacturing or selling and administrative expenses are not considered in determining the contribution margin