Question

ABC Corporation sells its product for $195.70 per unit. In 2015 the company had total sales in units of 6,000. The total costs were the following:

Variable cost of sales $457,800

Fixed cost of sales 100,000

Variable selling & administrative costs 108,500

Fixed selling & administrative costs 512,400

What is the best estimate of the total contribution margin?

Answer 1

Ans.	Total contribution margin                  =	$607,900
	*Explanations and Calculations: Total contribution margin is equal to the difference
	between total sales and total variable costs.
	Step 1 : Calculations of Total sales:
	Total sales =   Sales in units * Selling price
	6,000 * $195.70
	$1,174,200
	Step 3 : Calculations of Total variable costs :
	Particulars	Amount
	Variable cost of sales	$457,800
	Variable selling & administrative costs	$108,500
	Total variable costs	$566,300
	Step 3 : Calculations of Total contribution margin :
	Particulars	Amount
	Sales	$1,174,200
	Less: Total variable costs	-$566,300
	Total contribution margin	$607,900