Question

operation, 2,300 units were produced and 1,800 units were sold. Actual fixed costs are the same as the amount budgeted for the month. Other information for the month includes: Variable manufacturing costs $23.00 per unit Variable marketing costs $6.00 per unit Fixed manufacturing costs $15 per unit Administrative expenses, all fixed $21.00 per unit Ending inventories: Direct materials -0- WIP -0- Finished goods 500 units What is the contribution margin using variable costing

Answer 1

$124,200

Step-by-step explanation:

Swan Textiles Inc contribution margin using variable costing

Total sales = $98.00 × 1,800 = $176,400

Variable cost of goods sold = $23.00 × 1,800 = $41,400

Variable marketing costs = $6.00 × 1,800 = $10,800

Total variable costs ($41,400+ $10,800)= $52,200

Contribution margin = $176,400 - $52,200 = $124,200

Therefore the contribution margin using variable costing will be $124,200

Answer 2

$124,200

Step-by-step explanation:

Contribution margin is net of sales value and variable cost. This value is available to cover the fixed cost of the business and profit after adjusting fixed cost.

As per given data

Price = $98

Numbers of units sold = 1,800

Total Sales = $98 x 1,800 = $176,400

Variable cost = $23 x 1,800 units = $41,400

Variable marketing cost = $6 x 1,800 = $10,800

Total Variable cost = $41,400 + $10,800 = $52,200

Contribution Margin = Total Sales - Total Variable cost

Contribution Margin = $176,400 - $52,200

Contribution Margin = $124,200