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Bay State College Operations And Supply Chain Management Assignment Help - contribution margin


Question - Washington Company manufactures and sells a single product. The following costs were incurred
during the company's first year of operation:
Direct Material $18.00
Direct labor $5.00
Variable manufacturing overhead $4.00
Variable selling and administrative $5.00

Fixed cost for year:
Fixed manufacturing overhead $150,000
Fixed selling and administrative expenses $110,000

During the year, the company produced 25,000 units and sold 20,000 units. The selling price of the
company's product is $45.00 per unit.

Compute the company's contribution margin assuming the company uses the contribution margin
format income statement.

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