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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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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