Answer:
Manufacturing Margin: Manufacturing margin Is the difference between sales and the variable cost of good sold
.
Contribution margin: The contribution margin is the amount which is derived from sales revenue, after subtracting the variable expenses. This amount contributes toward covering fixed expense and then towards profit for the period
Net income: Net Income u the income after deducting all the expense, from the gross Income. It is also termed as net profit or net earning
a. Computation of the manufacturing margin for the month of March:
Manufacturing margin = Net sales - Variable cost of goods sold
Manufacturing margin = $912,000 - $474,000
Manufacturing margin = $438,000
Thus, the manufacturing margin for the month of March is $438,000
.
b. Computation of the contribution margin for the month of March:
Contribution margin = Manufacturing margin - Variable selling
Contribution margin = $438,000 - $238,100
Contribution margin = $199,900
Thus, the contribution mar gm for the month of march is $199,900
c. Computation of the income from operations for the month of March:
Income from operations = Contribution margin - Fixed manufacturing costs - Fixed selling and administrative expenses
Income from operations =$199,900 - $82,000 - $54,700
Income from operations = $63,200
Thus, the income from operations for the month of March is $63,200.
