Question

Novak Imports is a merchandising Firm. Last year they reported sales of $677000 and cost of goods sold of $405100. The company's total variable selling and administrative expense was $60750, and fixed selling and administrative expense was $54350. The total contribution margin for the firm is:

Answer 1

Contribution margin = $211,150

Contribution margin ratio = 31.19%

Step-by-step explanation:

total sales revenue $677,000

variable costs:

• Cost of goods sold $405,100
• S&A expenses $60,750 ($465,850)

Contribution margin $211,150

Fixed expenses ($54,350)

Operating income $156,800

Contribution margin ratio = $211,150 / $677,000 = 31.19%