Anders Supply experienced the following costs in May: During May, the company ma

Question

Anders Supply experienced the following costs in May:

During May, the company manufactured 22,000 units and sold 24,000 units. Beginning inventory totaled 3,400 units. If the average selling price per unit was $28, how much is the company’s contribution margin?

Direct materials $6.50 per unit Direct labor $2.20 per unit Manufacturing overhead costs Variable $3.10 per unit Fixed $44,000 Selling & administrative costs Variable selling costs $1.50 per unit Fixed selling costs $21,000 Fixed administrative costs $16,000

Explanation / Answer

Calculate contribution margin :

Sales (24000*28) 672000 Less: Variable cost of goods sold Direct material (24000*6.50) (156000) Direct labour (24000*2.20) (52800) Variable manufacturing overhead (24000*3.10) (74400) Total variable cost of goods sold (283200) Manufacturing margin 388800 Variable selling and administrative expenses (24000*1.50) (36000) Total contribution margin 352800

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---