Question

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 $fill in the blank 1 b. Contribution margin $fill in the blank 2 c. Operating income

Answer 1

Answer:

Results are below.

Explanation:

The variable costing method incorporates all variable production costs (direct material, direct labor, and variable overhead).

Manufacturing contribution margin= 912,000 - 474,000

Manufacturing contribution margin= 438,000

Now, the total contribution margin:

Total contribution margin= manufacturing contribution margin - Variable selling and administrative expenses

Total contribution margin= 438,000 - 238,100

Total contribution margin= $199,900

Finally, the income statement:

Sales= 912,000

Total Variable cost= 474,000 + 238,100= (712,100)

Total contribution margin= 199,900

Fixed manufacturing costs= (82,000)

Fixed selling and administrative expenses= (54,700)

Net operating income= 63,200