Question

The following information is available for Forever Fragrance Company's Southern Territory by salesperson: Garcia Jones Total Sales $30,000 $40,000 $70,000 Variable cost of goods sold 3,600 4,800 8,400 Variable selling expenses: Promotion costs 5,000 8,000 13,000 Sales commissions 4,500 6,000 10,500 What is the contribution margin for Jones? a. $21,200 b. $35,200 c. $40,000 d. $27,200

Answer 1

Answer:

a. Contribution Margin = $21,200

Explanation:

Contribution margin = Sales Value - Variable Expenses

Here it is provided that

Sales for Jones = $40,000

Less: Variable Expenses

Cost of goods sols = ($4,800)

Variable Promotion costs = ($8,000)

Variable Sales Commission = ($6,000)

Net Variable Expenses = ($18,800)

Contribution Margin = $40,000 - $18,800 = $21,200