If there is an insufficient contribution margin to cover fixed expenses, there will always be an occurrence of a net loss.
<h3>What is a Contribution Margin?</h3>
The contribution margin can be expressed in gross income terms. After subtracting the variable element of the firm's expenditures, it indicates the extra money gained for each product sold.
The contribution margin is calculated by subtracting the selling price/unit from the variable cost/unit.
This metric displays how much a certain product adds to the company's total earnings. It displays the share of revenue that helps to pay the firm's fixed costs and gives one approach to illustrate the profit potential of a certain product supplied by a company.
Therefore, If there is an insufficient contribution margin to cover fixed expenses, there will always be an occurrence of a net loss.
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Your current balance<span> is the amount of money in your account at the beginning of a business day. This amount does not include any pending deposits or withdrawals. Your </span>available balance<span> is your </span>current balance<span> minus any pending debit card purchases, automatic drafts, processing checks or other debits from your account</span>
Answer:
Contribution Margin Income Statement
+Sales Revenue 1,400 x $95 = $133,000
-Variable production costs 1,400 x $65 = ($91,000)
-Variable selling costs 1,400 x $2 = ($2,800)
=Contribution Margin $133,000 - $91,000 - $2,800
= $39,200
-Fixed production costs ($13,000)
=Net profit = $39,200 - $13,000
= $26,200
Answer:
Overhead rate= 34.24
Explanation:
Giving the following information:
Labor-hours for the upcoming year at 38,600.
The estimated variable manufacturing overhead was $5.90.
The estimated total fixed manufacturing overhead was $1,093,924.
Overhead rate= Estimated indirect cost/allocation measure
Overhead rate=[(38600*5.90+1093924)]/38600= 34.24
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