
Concept explainers
(1)
Contribution Margin
Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.
To Prepare: The contribution margin by state report for Company TS.
(2)
The additional profit for each state, if the sales amount increased by 20% and decrease in advertising expenses.
(3)
To Identify: Which state will provide the greatest profit return for a $42,200 increasing in advertising expenses?

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Chapter 20 Solutions
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