The CPC department of Alex shows gross sales of $735,000 for computer supplies and $935,000 for office supplies. The cost of the computer supplies was $534,000 and the cost of the office supplies was $491,400. Direct expenses were $75,700 for the company and indirect expenses were $75,200. What was the contribution margin for the company?

Question

Quizplus · Accepted Answer

The contribution margin is calculated as the total sales minus the variable costs (cost of goods sold and direct expenses in this case). For computer supplies: Sales = $735,000, Cost = $534,000. For office supplies: Sales = $935,000, Cost = $491,400. Direct expenses = $75,700. Thus, contribution margin = ($735,000 - $534,000) + ($935,000 - $491,400) - $75,700 = $201,000 + $443,600 - $75,700 = $568,900. Indirect expenses are not subtracted in the calculation of the contribution margin.

The CPC Department of Alex Shows Gross Sales of $735,000