Butler Sales Company is a distributor that has an exclusive franchise to sell a particular product made by another company. Butler Sales Company's traditional format income statements for the last two years are given below:
Selling and administrative expense is a mixture of fixed costs and variable costs that vary with respect to the number of units sold.
Required:
a. Estimate the company's variable selling and administration expense per unit, and its total fixed selling and administrative expense per year.
b. Compute the company's contribution margin for this year.

Question

Butler Sales Company is a distributor that has an exclusive franchise to sell a particular product made by another company. Butler Sales Company's traditional format income statements for the last two years are given below:
  Selling and administrative expense is a mixture of fixed costs and variable costs that vary with respect to the number of units sold.
Required:
a. Estimate the company's variable selling and administration expense per unit, and its total fixed selling and administrative expense per year.
b. Compute the company's contribution margin for this year.

Quizplus · Accepted Answer

The Answer of Butler Sales Company is a distributor that has an exclusive franchise to sell a particular product made by another company. Butler Sales Company's traditional format income statements for the last two years are given below:
  Selling and administrative expense is a mixture of fixed costs and variable costs that vary with respect to the number of units sold.
Required:
a. Estimate the company's variable selling and administration expense per unit, and its total fixed selling and administrative expense per year.
b. Compute the company's contribution margin for this year.

Butler Sales Company Is a Distributor That Has an Exclusive