Porter Company has provided the following data for the second quarter of the mos
ID: 2362005 • Letter: P
Question
Porter Company has provided the following data for thesecond quarter of the most recent year:
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $300,000
Fixed manufacturing overhead. . . . . . . . . . . . . . 55,000
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72,500
Fixed selling expense . . . . . . . . . . . . . . . . . . . . . 46,250
Variable manufacturing overhead . . . . . . . . . . . 41,000
Variable administrative expense. . . . . . . . . . . . . 48,000
Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . 51,500
Fixed administrative expense. . . . . . . . . . . . . . . 44,500
Variable selling expense. . . . . . . . . . . . . . . . . . . $ 49,750
Assume that direct labor is a variable cost and that there
were no beginning or ending inventories.
What is the total contribution margin of Porter Company
for the second quarter?
Explanation / Answer
Sales $300,000 Less Var costs : Direct labor $72,500 Variable manufacturing overhead $41,000 Variable administrative expense $48,000 Direct materials $51,500 Variable selling expense $ 49,750 ------------------------------------------ Total Cont Margin = $37,250