Question

Margie Company produces a single product and has provided the following data concerning its most recent month of operations: Selling price $ 88 Units in beginning inventory 0 Units produced 5,200 Units sold 4,900 Units in ending inventory 300 Variable costs per unit: Direct materials $ 12 Direct labor $ 23 Variable manufacturing overhead $ 2 Variable selling and administrative expense $ 5 Fixed costs: Fixed manufacturing overhead $ 161,200 Fixed selling and administrative expense $ 63,700 The total contribution margin for the month under variable costing is:

Answer 1

$225,400

Step-by-step explanation:

The computation of total contribution margin under variable costing is shown below:-

Sales (4900 × $88) $431,200

Less:Variable cost

Direct material (4900 × $12) ($58,800)

Direct labor (4900 × 23) ($112,700)

Variable manufacturing overhead

(4900 × 2) ($9,800)

Variable selling and administrative

expenses (4900 × $5) ($24,500)

Total variable expenses ($205,800)

Contribution margin $225,400

Therefore the total contribution margin under variable costing is $225,400