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)

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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.

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E4-8 Plevin Company ended its fiscal year on July 31, 2014. The company's adjusted trial balance as of the end of its fiscal year is shown below. PLEVIN COMPANY Adjusted Trial Balance July 31, 2014 (b) Tota Journal entries, closing (LO 2, No. Account Titles Debit Credit 101 Cash $ 9,840 112 Accounts Receivable 8,780 157 Equipment 15,900 158 Accumulated Depreciation-Equip. $ 7,400 201 Accounts Payable 4,220 208 Unearned Rent Revenue 1,800 301 Owner's Capital 45,200 306 Owner's Drawings 16,000 400 Service Revenue 64,000 6,500 429 Rent Revenue 711 Depreciation Expense 8,000 726 Salaries and Wages Expense 55,700 732 Utilities Expense 14,900 $129,120 $129,120 Instructions (a) Prepare the closing entries using page J15. (b) Post to Owner's Capital and No. 350 Income Summary accounts. (Use the three-column form.) (c) Prepare a post-closing trial balance at July 31.

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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.

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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.

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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.

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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

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