Explore BrainMass
Share

Contribution Margin & Effects of Surprising Sales Boost

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

Sitting Pretty, Inc. makes garden chairs that sell for $800 each. The variable cost of producing the chairs is $300 per unit and the fixed costs are $50,000 each month.

a. What is the contribution margin associated with the chairs produced and sold by Sitting Pretty?
b. In June, the company had sales that were $5,000 higher than anticipated. What is the expected effect on profits as a result of these sales?

© BrainMass Inc. brainmass.com October 25, 2018, 9:41 am ad1c9bdddf
https://brainmass.com/business/job-order-costing/contribution-margin-effects-of-surprising-sales-boost-583121

Solution Preview

a.

Contribution margin = [Selling price - Variable cost] = $800 - $300 = ...

Solution Summary

The brief calculations to find the contribution margin and effect on profits of higher-than-expected sales for Sitting Pretty are shown.

$2.19
See Also This Related BrainMass Solution

International Trade

You are eating a fruit salad that contains the following ingredients: bib lettuce, bananas, apples, coconut, kiwi, mango, avocado, figs, and almonds. Make a list or each item in your salad and their countries of origin.

Include why each fruit grows well in that particular area.

Then, determine crops, in addition to the fruit salad items, are grown in your area.

Address the following topics:

How many items in your salad were locally grown?

How dependent on international trade and trade between states are we?

Discuss the impact of the movement of food around the world.

View Full Posting Details