The following information is provided for Southall Company: $\begin{array}{lr}
\text { Sales revenue } & \$ 125,000 \
\text { Variable manufacturing costs } & 42,500 \
\text { Fixed manufacturing costs } & 37,500 \
\text { Variable selling and administrative costs } & 15,000 \
\text { Fixed selling and administrative costs } & 12,500
\end{array}$ What is this company's contribution margin?
A) $30,000
B) $17,500
C) $45,000
D) $67,500

Question

Quizplus · Accepted Answer

The contribution margin is calculated as Sales Revenue minus Variable Costs (both manufacturing and selling & administrative). So, $125,000 - $42,500 (Variable manufacturing costs) - $15,000 (Variable selling and administrative costs) = $67,500.

The Following Information Is Provided for Southall Company What Is This Company's Contribution Margin? A) $30,000 B) $17,500

The Following Information Is Provided for Southall Company What Is This Company's Contribution Margin?
A) $30,000
B) $17,500