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7 June, 09:02

Hinge manufacturing's cost of goods sold is $420000 variable and $240000 fixed. the company's selling and administrative expenses are $300000 variable and $360000 fixed. if the company's sales is $1580000, what is its contribution margin

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  1. 7 June, 09:21
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    Contribution Margin $ 920,000 Absorption Costing

    Contribution Margin $ 860,000 Variable Costing

    Explanation:

    Hinge Manufacturing

    Absorption Costing

    Sales $1580000

    Cost of Goods sold

    Less Variable Costs $420000

    Manufacturing Margin $1160,000

    Less Fixed Costs $240000

    Selling and Administrative expenses

    Variable $300,000

    Fixed $360,000

    Net Income $ 260,000

    Hinge Manufacturing

    Variable Costing

    Sales $1580000

    Cost of Goods sold

    Less Variable Costs $420,000

    Selling and Administrative expenses Variable $300,000

    Contribution Margin $ 860,000

    Less Fixed Costs $240000

    Selling and Administrative expenses Fixed $360,000

    Net Income $ 260,000
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