Zahra's Decoratives produces and sells a decorative pillow for $97.50 per unit. In the first month of operation, 2,000 units were produced and 1,750 units were sold. Actual fixed costs are the same as the amount budgeted for the month. Other information for the month includes:
$\begin{array}{ll}
\text { Variable manufacturing costs } & \$ 22.10 \text { per unit } \
\text { Variable marketing costs } & \$ 3.90 \text { per unit } \
\text { Fixed manufacturing costs } & \$ 13.00 \text { per unit } \
\text { Administrative expenses, all fixed } & \$ 19.50 \text { per unit } \
\text { Ending inventories: } & \
\quad \text { Direct materials } & -0- \
\quad \text { WIP } & -0- \
\quad \text { Finished goods } & 250 \text { units }
\end{array}$
-What is the contribution margin using variable costing?

Question

Zahra's Decoratives produces and sells a decorative pillow for $97.50 per unit. In the first month of operation, 2,000 units were produced and 1,750 units were sold. Actual fixed costs are the same as the amount budgeted for the month. Other information for the month includes:
 $\begin{array}{ll}
\text { Variable manufacturing costs } & \$ 22.10 \text { per unit } \
\text { Variable marketing costs } & \$ 3.90 \text { per unit } \
\text { Fixed manufacturing costs } & \$ 13.00 \text { per unit } \
\text { Administrative expenses, all fixed } & \$ 19.50 \text { per unit } \
\text { Ending inventories: } & \
\quad \text { Direct materials } & -0- \
\quad \text { WIP } & -0- \
\quad \text { Finished goods } & 250 \text { units }
\end{array}$
-What is the contribution margin using variable costing?

Quizplus · Accepted Answer

The Answer of Zahra's Decoratives produces and sells a decorative pillow for $97.50 per unit. In the first month of operation, 2,000 units were produced and 1,750 units were sold. Actual fixed costs are the same as the amount budgeted for the month. Other information for the month includes:
 $\begin{array}{ll}
\text { Variable manufacturing costs } & \$ 22.10 \text { per unit } \
\text { Variable marketing costs } & \$ 3.90 \text { per unit } \
\text { Fixed manufacturing costs } & \$ 13.00 \text { per unit } \
\text { Administrative expenses, all fixed } & \$ 19.50 \text { per unit } \
\text { Ending inventories: } & \
\quad \text { Direct materials } & -0- \
\quad \text { WIP } & -0- \
\quad \text { Finished goods } & 250 \text { units }
\end{array}$
-What is the contribution margin using variable costing?

Zahra's Decoratives Produces and Sells a Decorative Pillow for $97