Question

Ormand Company uses variable costing for internal decision-making purposes and has the following information for June: Sales $900,000 Variable cost of goods sold 440,000 Fixed manufacturing costs 160,000 Variable selling and administrative expenses 100,000 Fixed selling and administrative expenses 70,000 What is the manufacturing margin?

Answer 1

Answer:

The manufacturing margin is $460000

Explanation:

Margin is the difference between a company revenue (sales) and the cost of manufacturing. Manufacturing margin is the profit a manufacturer gets from sales of goods or services. Fixed manufacturing costs, variable selling and administrative expenses and Fixed selling and administrative expenses are not used when calculating the manufacturing margin.

Manufacturing margin = Sales - Variable costs of goods sold = $900000 - $440000 = $460000

The manufacturing margin is $460000