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valentinak56 [21]
3 years ago
13

It costs Homer's Manufacturing $0.75 to produce baseballs and Homer sells them for $4.00 a piece. Homer pays a sales commission

of 5% of sales revenue to his sales staff Homer also pays $12,000 a month rent for his factory and store, and also pays $75,000 a month to his staff in addition to the commissions. Homer sold 67,500 baseballs in June. If Homer prepares a contribution margin income statement for the month of June, what would be his contribution margin?A) $205,875B) $334,125C) $64,125D) $270,000
Business
1 answer:
Alex Ar [27]3 years ago
5 0

Answer:

A) $205,875

Explanation:

The formula to compute the contribution margin is shown below:

Contribution margin = Sales - Variable cost

where,

Sales = Number of basketballs sold × selling price per unit

         = 67,500 × $4

        = $270,000

And, the variable cost = Sales commission + manufacturing cost

The sales commission = Sales revenue × commission percentage

                                      = $270,000 × 5%

                                      = $13,500

And, the manufacturing cost equal to

= Number of basket balls sold × price per unit

= 67,500 × $0.75

= $50,625

So, the variable cost equal to

= $13,500 + $50,625

= $64,125

Now put these values to the above formula  

So, the value would equal to

= $270,000 - $64,125

= $205,875

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Helpful hardware sells windows (80% of sales) and doors (20% of sales). the selling price of each window is $580 and of each doo
kow [346]

The weighted-average contribution margin of Helpful hardware which sells windows and doors is $216.

<h3>Calculation of Weighted-Average Contribution Margin</h3>

The weighted-average contribution margin can be calculated using the following formula:

Weighted-average contribution margin = (Contribution margin of windows * Percentage sales contribution of windows) + (Contribution margin of doors * Percentage sales contribution of doors) ……….. (1)

Where:

Contribution margin of windows = Selling price of each window - Variable cost of each window = $580 - $385 = $195

Percentage sales contribution of windows = 80%

Contribution margin of doors = Selling price of each door - Variable cost of each door = $1,180 - $880 = $300

Percentage sales contribution of doors = 20%

Substituting all the values into equation (1), we have:

Weighted-average contribution margin = ($195 * 80%) + ($300 * 20%) = $216

Therefore, the weighted-average contribution margin is $216.

Learn more about weighted-average contribution margin here: brainly.com/question/17054087.

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