Estimate the companys total variable cost

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Reference no: EM13336449

Joe's Tabletops

Joe's Tabletops produces fine tabletops. The company's income statements for two months during the last year are given below:

	April	July
Units sold	5,000	7,000
Sales	$8,000,000	$11,200,000
Cost of goods sold	5,500,000	7,100,000
Gross margin	2,500,000	4,100,000
Selling & administrative expense	1,500,000	1,900,000
Net operating income	$1,000,000	$ 2,200,000

The company has no beginning or ending inventories.

Required:

1) Estimate the company's total variable cost per unit and its total fixed costs per year.

2) Compute the company's contribution margin for July.

Reference no: EM13336449

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