merchandiser plans to sell 13,400 units next month at a selling price of $110 per unit. It also gathered the following cost estimates for next month: Cost Cost Formula Cost of goods sold $60 per unit sold Advertising expense $150,000 per month Depreciation expense $70,000 per month Shipping expense $100,000 per month + $10 per unit sold Administrative salaries $50,000 per month Sales commissions 5% of sales Insurance expense $15,000 per month What is the estimated total contribution margin for next month?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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 merchandiser plans to sell 13,400 units next month at a selling price of $110 per unit. It also gathered the following cost estimates for next month:

Cost Cost Formula
Cost of goods sold $60 per unit sold
Advertising expense $150,000 per month
Depreciation expense $70,000 per month
Shipping expense $100,000 per month + $10 per unit sold
Administrative salaries $50,000 per month
Sales commissions 5% of sales
Insurance expense $15,000 per month

What is the estimated total contribution margin for next month?

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