Chapter 10, Problem 7P

A construction company has total revenues of $1,150,000, total construction costs of $956,000, and general overhead costs of $159,000 for the year. Determine the company’s total profit for the year and the percentage of the construction revenues that became profits.

What are the contribution margin and the contribution margin ratio for the company in Problem 5 if $15,000 of the overhead is considered variable overhead?