The following information for the past year for the Blaine Corporation has been provided: Fixed costs: Manufacturing $100,000 Marketing 22,000 Administrative 18,000 Variable costs: Manufacturing $114,000 Marketing 31,000 Administrative 40,000 During the year, the company produced and sold 40,000 units of product at a selling price of $14.43 per unit. There was no beginning inventory of product at the beginning of the year. What is the contribution margin for the year

Question

Haley Pratt

Business

14 September, 11:14

The following information for the past year for the Blaine Corporation has been provided: Fixed costs: Manufacturing $100,000 Marketing 22,000 Administrative 18,000 Variable costs: Manufacturing $114,000 Marketing 31,000 Administrative 40,000 During the year, the company produced and sold 40,000 units of product at a selling price of $14.43 per unit. There was no beginning inventory of product at the beginning of the year. What is the contribution margin for the year

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Edwin Dorsey · Answer 1

The contribution margin for the year is $463,200.

Explanation:

Contribution margin is the amount by which sales revenue exceeds variable costs. Variable costs are more tied to the development of the product and is greatly affected by the number of products sold. Examples of variable costs are labor and materials.

Sales revenue

40,000 units * $ 14.43 = $577,200

Variable costs

$114,000

Contribution margin

$577,200 - $114,000 = $463,200