Evaluate the total contribution margin

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Reference no: EM13333210

Question

Use the following information to answer this question.

Callaham Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $115.80 per unit.

 

Sales volume (units)


4,000

5,000

Cost of sales

$338,000

$422,500

Selling and administrative costs

$89,600

$106,000

The best estimate of the total contribution margin when 4,300 units are sold is

Question

Indiana Corporation produces a single product that it sells for $9 per unit. During the first year of operations, 100,000 units were produced, and 90,000 units were sold. Manufacturing costs and selling and administrative expenses for the year were as follows:

 

Fixed Costs

Variable Costs

Raw materials

 

$1.75 per unit produced

Direct labor

 

$1.25 per unit produced

Factory overhead

$100,000

$0.50 per unit produced

Selling and administrative

$70,000

$0.60 per unit
sold

What was Indiana Corporation's net operating income for the year using variable costing?

Reference no: EM13333210

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