Philadelphia Company has the following information for March:- **Sales**: $476,824- **Variable cost of goods sold**: $212,488- **Fixed manufacturing costs**: $78,357- **Variable selling and administrative expenses**: $49,816- **Fixed selling and administrative expenses**: $38,848**Determine the March:**a. **Manufacturing margin**: $ [Input Box] b. **Contribution margin**: $ [Input Box]c. **Operating income for Philadelphia Company**: $ [Input Box]

Answered: Philadelphia Company has the following…

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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Philadelphia Company has the following information for March:

- **Sales**: $476,824
- **Variable cost of goods sold**: $212,488
- **Fixed manufacturing costs**: $78,357
- **Variable selling and administrative expenses**: $49,816
- **Fixed selling and administrative expenses**: $38,848

**Determine the March:**

a. **Manufacturing margin**: $ [Input Box]

b. **Contribution margin**: $ [Input Box]

c. **Operating income for Philadelphia Company**: $ [Input Box]

Expert Solution

Explanation -

Variable Costing -

Under Variable Costing Income Statement all the variable Costs are deducted from the sales to arrive at the Contribution Margin. The contribution Margin is calculated from the sales minus variable costs.

From the Contribution margin fixed costs are deducted to arrive at the Operating Income.

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