Question

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

Sales $424,800
Cost of goods sold (all variable) $180,100
Total variable selling expense $18,200
Total fixed selling expense $15,300
Total variable administrative expense $8,700
Total fixed administrative expense $31,200

The gross margin for October is:

a. $171,300
b. $378,300
c. $217,800
d. $244,700

Answer 1

$217,800

Step-by-step explanation:

Calip corporation reported a sales of $428,800

The cost of goods is $180,100

The total variable selling expense is $18,200

The total fixed selling expense is $15,300

The total administrative expense is $8,700

The first step is to calculate the total variable expense

= cost of goods + variable administrative expense + variable selling expense

= 180,100 + 8,700 + 18,200

= 207,000

Therefore the gross margin for October can be calculated as follows

Sales - total variable expense

= 424,800 - 207,000

= $217,800

Hence the gross margin for October is $217,800