Capity Tea Products has an exclusive contract with British Distributors. Calamine and Capity are two brands of teas that are imported and sold to retail outlets. The following information is provided for the month of March: ActualBudget CalamineCapityCalamineCapity Sales in pounds3,800 lbs.3,980 lb.4,400 lbs.3,300 lbs. Price per pound$3.00$2.90$2.00$3.00 Variable cost per pound1.002.201.001.50 Contribution margin$2.00$0.70$1.00$1.50 Budgeted and actual fixedcorporate−sustainingcosts are $1,850 and $2,300, respectively. What is the actual contribution margin for the month?

Answered: Image /qna-images/answer/9f5f3679-d04a-4046-a1a3-ee05f10bebc7.jpgActual contribution margin for the month = $7600 + $2786=$10386

Answered: Capity Tea Products has an exclusive…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Capity Tea Products has an exclusive contract with British Distributors. Calamine and Capity are two brands of teas that are imported and sold to retail outlets. The following information is provided for the month of March:

	Actual	Budget
	Calamine	Capity	Calamine	Capity
Sales in pounds	3,800 lbs.	3,980 lb.	4,400 lbs.	3,300 lbs.
Price per pound	$3.00	$2.90	$2.00	$3.00
Variable cost per pound	1.00	2.20	1.00	1.50
Contribution margin	$2.00	$0.70	$1.00	$1.50

Budgeted and actual fixed

corporate−sustaining

costs are $1,850 and $2,300, respectively. What is the actual contribution margin for the month?

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