Question

Philadelphia Company has the following information for March: Sales $486,599 Variable cost of goods sold 205,621 Fixed manufacturing costs 77,725 Variable selling and administrative expenses 50,621 Fixed selling and administrating expenses 34,085 a. Determine the March manufacturing margin. $ b. Determine the March contribution margin. $ c. Determine the March income from operations for Philadelphia Company. $

Answer 1

Manufacturing margin is $203,253

Contribution margin is $230,357

Net income $118,547

Step-by-step explanation:

Manufacturing margin is the sales revenue minus manufacturing costs

Sales revenue $486,599

Cost of goods sold ($205,621)

fixed manufacturing cost ($77,725)

manufacturing margin $203,253

Contribution margin is sales revenue minus variable costs:

Sales revenue $486,599

Cost of goods sold ($205,621)

variable selling & admin ($50,621)

contribution margin $230,357

Income is the sales revenue minus all costs incurred:

Sales revenue $486,599

Cost of goods sold ($205,621)

fixed manufacturing cost ($77,725)

Variable selling & admin ($50,621)

Fixed selling & admin ($34,085)

Net income $118,547