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Total Contribution Margin for Porter Company

Porter Company has provided the following data for the second quarter of the most recent year: Assume that direct labor is a variable cost and that there were no beginning or ending inventories. The total contribution margin of Porter company for the second quarter was? How about the contribution margin?

Sales $800,000
Fixed manufacturing overhead 95,000
Direct Labor 82,500
Fixed Selling expense 96,250
Variable manufacturing overhead 81,000
Variable administrative expense 68,000
Direct materials 91,500
Fixed administrative expenses 40,500
Variable selling expense 89,750

Solution Preview

Total contribution margin = Total sales - total variable cost
Total sales = 800,000
Total variable cost is
Direct labor (given as variable) 82,500
Variable manufaturing overhead 81,000
Variable administrative ...

Solution Summary

The solution explains how to calculate the total contribution margin and gross margin