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    Total Contribution Margin and Gross Margin

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    Pinewood Company, which has only one product, has given the following data
    regarding its last month of operations:

    Selling Price.......................................................................$200
    Units in beginning inventory....................................0
    Units produced...........................................................5,000
    Units sold....................................................................4,800
    Units in ending inventory..........................................400

    Variable cost per unit:
    Direct materials...............................................$50
    Direct Labor.....................................................$25
    Variable Manufacturing Overhead.................$5
    Variable Selling & Administrative..................$15

    Fixed Costs:
    Fixed Manufacturing Overhead.....................$90,000
    Fixed Selling and Administrative...................$35,000

    1. What is the total contribution margin for the month step by step under the variable costing approach?

    2. What is the total gross margin for the month step by step under the absorption costing approach?

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    https://brainmass.com/business/accounting/total-contribution-margin-gross-margin-282426

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    1. What is the total contribution margin for the month step by step under the variable costing approach?

    Total contribution margin = (Selling price - total variable cost) units sold
    Selling Price = 200
    Total variable cost is
    Direct materials...............................................$50
    Direct ...

    Solution Summary

    The solution explains how to calculate gross margin and contribution margin

    $2.19

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