Variable Costing Ferguson Company has the following information for July: Sales $630,000 Variable cost of goods...

Variable Costing

Ferguson Company has the following information for July:

Sales	$630,000
Variable cost of goods sold	289,800
Fixed manufacturing costs	94,500
Variable selling and administrative expenses	69,300
Fixed selling and administrative expenses	37,800

Determine the following for Ferguson Company for the month of July:

a. Manufacturing margin	$
b. Contribution margin	$
c. Income from operations	$

Expert Solution

Part (a)	Manufacturing margin

	Sales		630,000
	Less : Cost of goods sold
	Variable cost of goods sold	289,800
	Fixed manufacturing costs	94,500
	Variable selling and administrative expenses	69,300
	Fixed selling and administrative expenses	37,800	491,400

	Manufacturing margin		138,600

Part (b)	Contribution margin

	Sales		630,000
	Less : Variable cost
	Variable cost of goods sold	289,800
	Variable selling and administrative expenses	69,300	359,100

	Contribution margin		270,900

Part (c)	Income from operations is equal to Manufacturing margin i.e. $138,600 since there is no further data.

ekkarill92 answered 1 year ago

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