Total contribution Margin and net operating income under Variable costing system: Contribution margin is calculated by reducing all the variable costs of a product from its sales. In other words contribution is selling price minus variable costs. Thus the total contribution represents the total earning available to recover its fixed expenses and to generate profits. Operating income is calculated by reducing the fixed expenses from the contribution margin. To Compute: The company’s net operating income under variable costing.

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Chapter 7, Problem 4F15

To determine

Total contribution Margin and net operating income under Variable costing system:

Contribution margin is calculated by reducing all the variable costs of a product from its sales. In other words contribution is selling price minus variable costs. Thus the total contribution represents the total earning available to recover its fixed expenses and to generate profits.

Operating income is calculated by reducing the fixed expenses from the contribution margin.

To Compute:

The company’s net operating income under variable costing.

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Chapter 7, Problem 4F15

To determine

Total contribution Margin and net operating income under Variable costing system:

Contribution margin is calculated by reducing all the variable costs of a product from its sales. In other words contribution is selling price minus variable costs. Thus the total contribution represents the total earning available to recover its fixed expenses and to generate profits.

Operating income is calculated by reducing the fixed expenses from the contribution margin.

To Compute:

The company’s net operating income under variable costing.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 3

Question

100%

Chapter 7, Problem 4F15

To determine

Total contribution Margin and net operating income under Variable costing system:

Contribution margin is calculated by reducing all the variable costs of a product from its sales. In other words contribution is selling price minus variable costs. Thus the total contribution represents the total earning available to recover its fixed expenses and to generate profits.

Operating income is calculated by reducing the fixed expenses from the contribution margin.

To Compute:

The company’s net operating income under variable costing.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

100%

Chapter 7, Problem 4F15

To determine

Total contribution Margin and net operating income under Variable costing system:

Contribution margin is calculated by reducing all the variable costs of a product from its sales. In other words contribution is selling price minus variable costs. Thus the total contribution represents the total earning available to recover its fixed expenses and to generate profits.

Operating income is calculated by reducing the fixed expenses from the contribution margin.

To Compute:

The company’s net operating income under variable costing.

Expert Solution & Answer

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Answer 7

Chapter 7, Problem 4F15

To determine

Total contribution Margin and net operating income under Variable costing system:

Contribution margin is calculated by reducing all the variable costs of a product from its sales. In other words contribution is selling price minus variable costs. Thus the total contribution represents the total earning available to recover its fixed expenses and to generate profits.

Operating income is calculated by reducing the fixed expenses from the contribution margin.

To Compute:

The company’s net operating income under variable costing.

Answer 8

Chapter 7, Problem 4F15

To determine

Total contribution Margin and net operating income under Variable costing system:

Contribution margin is calculated by reducing all the variable costs of a product from its sales. In other words contribution is selling price minus variable costs. Thus the total contribution represents the total earning available to recover its fixed expenses and to generate profits.

Operating income is calculated by reducing the fixed expenses from the contribution margin.

To Compute:

The company’s net operating income under variable costing.

Answer 9

Chapter 7, Problem 4F15

To determine

Total contribution Margin and net operating income under Variable costing system:

Contribution margin is calculated by reducing all the variable costs of a product from its sales. In other words contribution is selling price minus variable costs. Thus the total contribution represents the total earning available to recover its fixed expenses and to generate profits.

Operating income is calculated by reducing the fixed expenses from the contribution margin.

To Compute:

The company’s net operating income under variable costing.

Answer 10

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Answer 13

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Solution Summary: The author explains that the company's contribution margin is calculated by reducing all the variable costs of a product from its sales.

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