Question

Variable Costing Marsich Company has the following information for February:
Sales $740,000
Variable cost of goods sold 355,200
Fixed manufacturing costs 118,400
Variable selling and administrative expenses 81,400
Fixed selling and administrative expenses 44,400
Determine the following for Marsich Company for the month of February:
a. Manufacturing margin.
b. Contribution margin.
c. Operating income.

Answer 1

Answer:

a. Particulars                                       Amount

Sales                                                    $740,000

Less: Variable cost of goods sold     $355,200

Manufacturing margin                      $384,800

b.Particulars                                                                   Amount

Manufacturing margin                                                  $384,800

Less: Variable selling and administrative expenses  $81,400

Contribution margin                                                    $303,400

c. Particulars                          Amount

Contribution margin             $303,400

Less: Fixed costs                  $162,800  ($118,400+$44,400)

Income from operations     $140,600