Contribution Margin: Contribution margin can be defined as the difference between sales and variable costs. The portion i.e. left after deducting variable costs of the product from the sales, it is termed as contribution margin. C o n t r i b u t i o n M a r g i n = S a l e s R e v e n u e – T o t a l V a r i a b l e c o s t s To compute: Contribution Margin (in $ millions)

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 21, Problem 17QS

To determine

Concept Introduction:

Contribution Margin: Contribution margin can be defined as the difference between sales and variable costs. The portion i.e. left after deducting variable costs of the product from the sales, it is termed as contribution margin.

Contribution Margin = Sales Revenue – Total Variable costs

To compute:

Contribution Margin (in $ millions)

Expert Solution & Answer

Answer to Problem 17QS

Solution:

Contribution Margin (in $ millions) = $ 36,176.75 million

Explanation of Solution

The contribution margin (in $ millions) Will be calculated as under −
Given,

Total Cost of sales = $ 105,431 million
Total selling and administrative expenses = $ 15,500 million
Percent of cost of sales as variable = 75 %
Percent of total selling and administrative expenses as variable = 75 %

Variable portion of cost of sales = Total Cost of sales X 75 % Variable portion of cost of sales = $ 105,431 million X 75 % Variable portion of cost of sales = $ 79,073.25 million Fixed cost = Total Cost of sales − Variable portion of cost of sales Fixed cost = $ 105,431 million − $ 79,073.25 millionFixed cost = $ 26,357.75 million

The variable and fixed portion of total selling and administrative expenses will be calculated as under −

Variable portion of total selling and administrative expenses=Total selling and administrative expensesX75 % Variable portion of total selling and administrative expenses = $ 15,500 million X 75 % Variable portion of total selling and administrative expenses = $ 11,625 million Fixed cost = Total selling and administrative expenses − Variable portion of administrative expenses Fixed cost = $ 15,500 million − $ 11,625 millionFixed cost = $ 3,875 million

The total variable cost will be calculated as −

Total variable cost = Total variable cost of sales + Total variable selling and administrative expensesTotal variable cost = $ 79,073.25 million + $ 11,625 millionTotal variable cost = $ 90,698.25 million

The contribution margin will be calculated as under −

Contribution Margin = Sales revenue – Total variable costContribution Margin = $ 126,875 million − $ 90,698.25 millionContribution Margin = $ 36,176.75 million

Conclusion

Thus, the contribution margin (in dollars) has been calculated.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Alessandra Manufacturing produces various electronic components. Last year, the company's variable costing net operating income was $92,400, and ending inventory increased by 1,800 units. Fixed manufacturing overhead cost per unit was $5. Determine the absorption costing net operating income for last year.

Green, an individual taxpayer, who is not a day trader, has requested assistance from a CPA to calculate Year 2 gains and/or losses on the sale of various shares of stock. For each of the following transactions, calculate the correct gain or loss and enter the amount in the associated box in the Gain or Loss column. 1. Sold 200 shares of Y Corp. stock at $14 per share. Green received the 200 shares as a gift from his brother three years ago, when the shares had a fair market value of $10 per share. Green's brother purchased the stock for $16 per share. 2. Sold 200 shares of Y Corp. stock at $22 per share. Green received the 200 shares as a gift from his brother three years ago, when the shares had a fair market value of $26 per share. Green's brother purchased the stock for $16 per share. 3. Sold 450 shares of Z Corp. stock at $40 per share. Green received the 450 shares from his aunt's estate as a bequest. The fair market value of the stock at the date of his aunt's death was $32 per…

I am looking for help with this financial accounting question using proper accounting standards.

Answer 2

Question

Chapter 21, Problem 17QS

To determine

Concept Introduction:

Contribution Margin: Contribution margin can be defined as the difference between sales and variable costs. The portion i.e. left after deducting variable costs of the product from the sales, it is termed as contribution margin.

Contribution Margin = Sales Revenue – Total Variable costs

To compute:

Contribution Margin (in $ millions)

Expert Solution & Answer

Answer to Problem 17QS

Solution:

Contribution Margin (in $ millions) = $ 36,176.75 million

Explanation of Solution

The contribution margin (in $ millions) Will be calculated as under −
Given,

Total Cost of sales = $ 105,431 million
Total selling and administrative expenses = $ 15,500 million
Percent of cost of sales as variable = 75 %
Percent of total selling and administrative expenses as variable = 75 %

Variable portion of cost of sales = Total Cost of sales X 75 % Variable portion of cost of sales = $ 105,431 million X 75 % Variable portion of cost of sales = $ 79,073.25 million Fixed cost = Total Cost of sales − Variable portion of cost of sales Fixed cost = $ 105,431 million − $ 79,073.25 millionFixed cost = $ 26,357.75 million

The variable and fixed portion of total selling and administrative expenses will be calculated as under −

Variable portion of total selling and administrative expenses=Total selling and administrative expensesX75 % Variable portion of total selling and administrative expenses = $ 15,500 million X 75 % Variable portion of total selling and administrative expenses = $ 11,625 million Fixed cost = Total selling and administrative expenses − Variable portion of administrative expenses Fixed cost = $ 15,500 million − $ 11,625 millionFixed cost = $ 3,875 million

The total variable cost will be calculated as −

Total variable cost = Total variable cost of sales + Total variable selling and administrative expensesTotal variable cost = $ 79,073.25 million + $ 11,625 millionTotal variable cost = $ 90,698.25 million

The contribution margin will be calculated as under −

Contribution Margin = Sales revenue – Total variable costContribution Margin = $ 126,875 million − $ 90,698.25 millionContribution Margin = $ 36,176.75 million

Conclusion

Thus, the contribution margin (in dollars) has been calculated.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 21, Problem 17QS

To determine

Concept Introduction:

Contribution Margin: Contribution margin can be defined as the difference between sales and variable costs. The portion i.e. left after deducting variable costs of the product from the sales, it is termed as contribution margin.

Contribution Margin = Sales Revenue – Total Variable costs

To compute:

Contribution Margin (in $ millions)

Expert Solution & Answer

Answer to Problem 17QS

Solution:

Contribution Margin (in $ millions) = $ 36,176.75 million

Explanation of Solution

The contribution margin (in $ millions) Will be calculated as under −
Given,

Total Cost of sales = $ 105,431 million
Total selling and administrative expenses = $ 15,500 million
Percent of cost of sales as variable = 75 %
Percent of total selling and administrative expenses as variable = 75 %

Variable portion of cost of sales = Total Cost of sales X 75 % Variable portion of cost of sales = $ 105,431 million X 75 % Variable portion of cost of sales = $ 79,073.25 million Fixed cost = Total Cost of sales − Variable portion of cost of sales Fixed cost = $ 105,431 million − $ 79,073.25 millionFixed cost = $ 26,357.75 million

The variable and fixed portion of total selling and administrative expenses will be calculated as under −

Variable portion of total selling and administrative expenses=Total selling and administrative expensesX75 % Variable portion of total selling and administrative expenses = $ 15,500 million X 75 % Variable portion of total selling and administrative expenses = $ 11,625 million Fixed cost = Total selling and administrative expenses − Variable portion of administrative expenses Fixed cost = $ 15,500 million − $ 11,625 millionFixed cost = $ 3,875 million

The total variable cost will be calculated as −

Total variable cost = Total variable cost of sales + Total variable selling and administrative expensesTotal variable cost = $ 79,073.25 million + $ 11,625 millionTotal variable cost = $ 90,698.25 million

The contribution margin will be calculated as under −

Contribution Margin = Sales revenue – Total variable costContribution Margin = $ 126,875 million − $ 90,698.25 millionContribution Margin = $ 36,176.75 million

Conclusion

Thus, the contribution margin (in dollars) has been calculated.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 21, Problem 17QS

To determine

Concept Introduction:

Contribution Margin: Contribution margin can be defined as the difference between sales and variable costs. The portion i.e. left after deducting variable costs of the product from the sales, it is termed as contribution margin.

Contribution Margin = Sales Revenue – Total Variable costs

To compute:

Contribution Margin (in $ millions)

Expert Solution & Answer

Answer to Problem 17QS

Solution:

Contribution Margin (in $ millions) = $ 36,176.75 million

Explanation of Solution

The contribution margin (in $ millions) Will be calculated as under −
Given,

Total Cost of sales = $ 105,431 million
Total selling and administrative expenses = $ 15,500 million
Percent of cost of sales as variable = 75 %
Percent of total selling and administrative expenses as variable = 75 %

Variable portion of cost of sales = Total Cost of sales X 75 % Variable portion of cost of sales = $ 105,431 million X 75 % Variable portion of cost of sales = $ 79,073.25 million Fixed cost = Total Cost of sales − Variable portion of cost of sales Fixed cost = $ 105,431 million − $ 79,073.25 millionFixed cost = $ 26,357.75 million

The variable and fixed portion of total selling and administrative expenses will be calculated as under −

Variable portion of total selling and administrative expenses=Total selling and administrative expensesX75 % Variable portion of total selling and administrative expenses = $ 15,500 million X 75 % Variable portion of total selling and administrative expenses = $ 11,625 million Fixed cost = Total selling and administrative expenses − Variable portion of administrative expenses Fixed cost = $ 15,500 million − $ 11,625 millionFixed cost = $ 3,875 million

The total variable cost will be calculated as −

Total variable cost = Total variable cost of sales + Total variable selling and administrative expensesTotal variable cost = $ 79,073.25 million + $ 11,625 millionTotal variable cost = $ 90,698.25 million

The contribution margin will be calculated as under −

Contribution Margin = Sales revenue – Total variable costContribution Margin = $ 126,875 million − $ 90,698.25 millionContribution Margin = $ 36,176.75 million

Conclusion

Thus, the contribution margin (in dollars) has been calculated.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 21, Problem 17QS

To determine

Concept Introduction:

Contribution Margin: Contribution margin can be defined as the difference between sales and variable costs. The portion i.e. left after deducting variable costs of the product from the sales, it is termed as contribution margin.

Contribution Margin = Sales Revenue – Total Variable costs

To compute:

Contribution Margin (in $ millions)

Expert Solution & Answer

Answer to Problem 17QS

Solution:

Contribution Margin (in $ millions) = $ 36,176.75 million

Explanation of Solution

The contribution margin (in $ millions) Will be calculated as under −
Given,

Total Cost of sales = $ 105,431 million
Total selling and administrative expenses = $ 15,500 million
Percent of cost of sales as variable = 75 %
Percent of total selling and administrative expenses as variable = 75 %

Variable portion of cost of sales = Total Cost of sales X 75 % Variable portion of cost of sales = $ 105,431 million X 75 % Variable portion of cost of sales = $ 79,073.25 million Fixed cost = Total Cost of sales − Variable portion of cost of sales Fixed cost = $ 105,431 million − $ 79,073.25 millionFixed cost = $ 26,357.75 million

The variable and fixed portion of total selling and administrative expenses will be calculated as under −

Variable portion of total selling and administrative expenses=Total selling and administrative expensesX75 % Variable portion of total selling and administrative expenses = $ 15,500 million X 75 % Variable portion of total selling and administrative expenses = $ 11,625 million Fixed cost = Total selling and administrative expenses − Variable portion of administrative expenses Fixed cost = $ 15,500 million − $ 11,625 millionFixed cost = $ 3,875 million

The total variable cost will be calculated as −

Total variable cost = Total variable cost of sales + Total variable selling and administrative expensesTotal variable cost = $ 79,073.25 million + $ 11,625 millionTotal variable cost = $ 90,698.25 million

The contribution margin will be calculated as under −

Contribution Margin = Sales revenue – Total variable costContribution Margin = $ 126,875 million − $ 90,698.25 millionContribution Margin = $ 36,176.75 million

Conclusion

Thus, the contribution margin (in dollars) has been calculated.

Answer 6

Chapter 21, Problem 17QS

To determine

Concept Introduction:

Contribution Margin: Contribution margin can be defined as the difference between sales and variable costs. The portion i.e. left after deducting variable costs of the product from the sales, it is termed as contribution margin.

Contribution Margin = Sales Revenue – Total Variable costs

To compute:

Contribution Margin (in $ millions)

Expert Solution & Answer

Answer to Problem 17QS

Solution:

Contribution Margin (in $ millions) = $ 36,176.75 million

Explanation of Solution

The contribution margin (in $ millions) Will be calculated as under −
Given,

Total Cost of sales = $ 105,431 million
Total selling and administrative expenses = $ 15,500 million
Percent of cost of sales as variable = 75 %
Percent of total selling and administrative expenses as variable = 75 %

Variable portion of cost of sales = Total Cost of sales X 75 % Variable portion of cost of sales = $ 105,431 million X 75 % Variable portion of cost of sales = $ 79,073.25 million Fixed cost = Total Cost of sales − Variable portion of cost of sales Fixed cost = $ 105,431 million − $ 79,073.25 millionFixed cost = $ 26,357.75 million

The variable and fixed portion of total selling and administrative expenses will be calculated as under −

Variable portion of total selling and administrative expenses=Total selling and administrative expensesX75 % Variable portion of total selling and administrative expenses = $ 15,500 million X 75 % Variable portion of total selling and administrative expenses = $ 11,625 million Fixed cost = Total selling and administrative expenses − Variable portion of administrative expenses Fixed cost = $ 15,500 million − $ 11,625 millionFixed cost = $ 3,875 million

The total variable cost will be calculated as −

Total variable cost = Total variable cost of sales + Total variable selling and administrative expensesTotal variable cost = $ 79,073.25 million + $ 11,625 millionTotal variable cost = $ 90,698.25 million

The contribution margin will be calculated as under −

Contribution Margin = Sales revenue – Total variable costContribution Margin = $ 126,875 million − $ 90,698.25 millionContribution Margin = $ 36,176.75 million

Conclusion

Thus, the contribution margin (in dollars) has been calculated.

Answer 7

Chapter 21, Problem 17QS

To determine

Concept Introduction:

Contribution Margin: Contribution margin can be defined as the difference between sales and variable costs. The portion i.e. left after deducting variable costs of the product from the sales, it is termed as contribution margin.

Contribution Margin = Sales Revenue – Total Variable costs

To compute:

Contribution Margin (in $ millions)

Answer 8

Expert Solution & Answer

Answer to Problem 17QS

Solution:

Contribution Margin (in $ millions) = $ 36,176.75 million

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

The contribution margin (in $ millions) Will be calculated as under −
Given,

Total Cost of sales = $ 105,431 million
Total selling and administrative expenses = $ 15,500 million
Percent of cost of sales as variable = 75 %
Percent of total selling and administrative expenses as variable = 75 %

Variable portion of cost of sales = Total Cost of sales X 75 % Variable portion of cost of sales = $ 105,431 million X 75 % Variable portion of cost of sales = $ 79,073.25 million Fixed cost = Total Cost of sales − Variable portion of cost of sales Fixed cost = $ 105,431 million − $ 79,073.25 millionFixed cost = $ 26,357.75 million

The variable and fixed portion of total selling and administrative expenses will be calculated as under −

Variable portion of total selling and administrative expenses=Total selling and administrative expensesX75 % Variable portion of total selling and administrative expenses = $ 15,500 million X 75 % Variable portion of total selling and administrative expenses = $ 11,625 million Fixed cost = Total selling and administrative expenses − Variable portion of administrative expenses Fixed cost = $ 15,500 million − $ 11,625 millionFixed cost = $ 3,875 million

The total variable cost will be calculated as −

Total variable cost = Total variable cost of sales + Total variable selling and administrative expensesTotal variable cost = $ 79,073.25 million + $ 11,625 millionTotal variable cost = $ 90,698.25 million

The contribution margin will be calculated as under −

Contribution Margin = Sales revenue – Total variable costContribution Margin = $ 126,875 million − $ 90,698.25 millionContribution Margin = $ 36,176.75 million

Answer 12

Conclusion

Thus, the contribution margin (in dollars) has been calculated.

Answer 13

Ch. 21 - Prob. 1DQ Ch. 21 - Prob. 2DQ Ch. 21 - When output volume increases, do fixed costs per...Ch. 21 - Prob. 4DQ Ch. 21 - Prob. 5DQ Ch. 21 - Describe the contribution margin ratio in...Ch. 21 - Prob. 7DQ Ch. 21 - Prob. 8DQ Ch. 21 - Prob. 9DQ Ch. 21 - Prob. 10DQ

Answer to Problem 17QS

Explanation of Solution

Want to see more full solutions like this?

Chapter 21 Solutions