merchandiser plans to sell 13,400 units next month at a selling price of $110 per unit. It also gathered the following cost estimates for next month:CostCost FormulaCost of goods sold$60 per unit soldAdvertising expense$150,000 per monthDepreciation expense$70,000 per monthShipping expense$100,000 per month + $10 per unit soldAdministrative salaries$50,000 per monthSales commissions5% of salesInsurance expense$15,000 per monthWhat is the estimated total contribution margin for next month?

Contribution margin is the difference between total sales revenue and total variable cost. It is…

Answered: merchandiser plans to sell 13,400 units…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 5EA: Maple Enterprises sells a single product with a selling price of $75 and variable costs per unit of...

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merchandiser plans to sell 13,400 units next month at a selling price of $110 per unit. It also gathered the following cost estimates for next month:

Cost	Cost Formula
Cost of goods sold	$60 per unit sold
Advertising expense	$150,000 per month
Depreciation expense	$70,000 per month
Shipping expense	$100,000 per month + $10 per unit sold
Administrative salaries	$50,000 per month
Sales commissions	5% of sales
Insurance expense	$15,000 per month

What is the estimated total contribution margin for next month?

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