Question

Variable Costing Marley Company has the following information for March: Sales $912,000 Variable cost of goods sold 474,000 Fixed manufacturing costs 82,000 Variable selling and administrative expenses 238,100 Fixed selling and administrative expenses 54,700 Determine the following for Marley Company for the month of March: a. Manufacturing margin $ b. Contribution margin $ c. Income from operations $

Answer 1

Answer:

(a) $438,000

(b) $199,900

(c) $63,200

Explanation:

(a) Manufacturing margin:

= Net sales - Variable cost of goods sold

= $912,000 - $474,000

= $438,000

(b) Contribution margin:

= Manufacturing margin - Variable selling and administrative expenses

= $438,000 - $238,100

= $199,900

(c) Income from operations:

= Contribution margin - Fixed selling and administrative expenses - Fixed manufacturing costs

= $199,900 - $54,700 - $82,000

= $63,200