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    Total Contribution Margin for Porter Company

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    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

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    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