### Company Financial Information AnalysisAssume the following information for a merchandising company:- **Sales**: $473,000- **Variable Selling Expenses**: $25,000- **Cost of Goods Sold (COGS)**: $350,000- **Fixed Administrative Expenses**: $50,000- **Fixed Selling Expenses**: $40,000- **Variable Administrative Expenses**: $5,000**Question:** What is the company's contribution margin?#### Multiple Choice Options- **Option 1**: $93,000- **Option 2**: $118,000- **Option 3**: $98,000- **Option 4**: $123,000**Explanation**: The contribution margin is calculated by subtracting the total variable expenses from sales. This involves the variable selling expenses, cost of goods sold, and variable administrative expenses. To calculate the contribution margin, use the formula:\[ \text{Contribution Margin} = \text{Sales} - (\text{Variable Selling Expenses} + \text{COGS} + \text{Variable Administrative Expenses}) \]Apply the values provided to find the correct option.

Total Variable cost = $25,000 + $350,000 + $5,000 = $380,000

Assume the following information for a merchandising company: $ 473,000 $ 25,000 $ 350,000 $ 50,000 $ 40,000 $ 5,000 Sales Variable selling expenses Cost of goods sold Fixed administrative expenses Fixed selling expenses Variable administrative expenses What is the company's contribution margin?

Assume the following information for a merchandising company: $ 473,000 $ 25,000 $ 350,000 $ 50,000 $ 40,000 $ 5,000 Sales Variable selling expenses Cost of goods sold Fixed administrative expenses Fixed selling expenses Variable administrative expenses What is the company's contribution margin?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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### Company Financial Information Analysis

Assume the following information for a merchandising company:

- **Sales**: $473,000
- **Variable Selling Expenses**: $25,000
- **Cost of Goods Sold (COGS)**: $350,000
- **Fixed Administrative Expenses**: $50,000
- **Fixed Selling Expenses**: $40,000
- **Variable Administrative Expenses**: $5,000

**Question:** What is the company's contribution margin?

#### Multiple Choice Options
- **Option 1**: $93,000
- **Option 2**: $118,000
- **Option 3**: $98,000
- **Option 4**: $123,000

**Explanation**: The contribution margin is calculated by subtracting the total variable expenses from sales. This involves the variable selling expenses, cost of goods sold, and variable administrative expenses. To calculate the contribution margin, use the formula:

\[ \text{Contribution Margin} = \text{Sales} - (\text{Variable Selling Expenses} + \text{COGS} + \text{Variable Administrative Expenses}) \]

Apply the values provided to find the correct option.

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