Question

Bolka Corporation, a merchandising company, reported the following results for October: 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 October is:

Answer 1

Contribution margin = $192300

Step-by-step explanation:

The term contribution margin per unit refers to the amount of money contributed by each unit towards covering the fixed costs of the company after accounting for all the related variable costs. In other words, this is the amount of money left from selling price per unit after deducting all the variable costs per unit from the selling price.

The contribution margin is the difference between the sales revenue and the total variable costs of the company. The formula for contribution margin is,

Contribution margin = Sales - Total Variable costs

Contribution margin = 406000 - (175800 + 25200 + 12700)

Contribution margin = $192300