Contribution Margin Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin. To Prepare: The contribution margin by state report for Company TS.

Question

Want to see the full answer?

Answer 1

Question

Chapter 20, Problem 20.5CP

(1)

To determine

Contribution Margin

Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.

To Prepare: The contribution margin by state report for Company TS.

(2)

To determine

The additional profit for each state, if the sales amount increased by 20% and decrease in advertising expenses.

(3)

To determine

To Identify: Which state will provide the greatest profit return for a $42,200 increasing in advertising expenses?

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Analyzing CVP relationships White Company sells flags with team logos. White has fixed costs of $639,600 per year plus variable costs of $4.20 per flag. Each flag sells for $12.00 Requirements Use the equation approach to compute the number of flags White must sell each year to break even. Use the contribution margin ratio approach to compute the dollar sales White needs to earn $32,500 in operating income for 2018 (Round the contribution margin to two decimal places.) Prepare White’s contribution margin income statement for the year ended December 31, 2018, for sales of 73,000 Flags (Round your final answers up to the next whole number) The company is considering an expansion that will increase fixed costs by 23% variable costs by $0.60 per flag Compute the new breakeven point in units and in dollars. Should White undertake the expansion? Give your reasoning (Round your final answers up to the next whole number.)

Territory and Product Profitability Analysis Coast to Coast Surfboards Inc. manufactures and sells two styles of surfboards, Atlantic Wave and Pacific Pounder. These surfboards are sold in two regions, East Coast and West Coast. Information about the two surfboards is as follows: Atlantic Wave Pacific Pounder Sales price $350 $250 Variable cost of goods sold per unit (130) (115) Manufacturing margin per unit $220 $135 Variable selling expense per unit (157) (70) Contribution margin per unit $63 $65 The sales unit volume for the territories and products for the period is as follows: East Coast West coast Atlantic Wave 2,780 1,390 Pacific Pounder 0 1390

Territory and Product Profitability Analysis Coast to Coast Surfboards Inc. manufactures and sells two styles of surfboards, Atlantic Wave and Pacific Pounder. These surfboards are sold in two regions, East Coast and West Coast. Information about the two surfboards is as follows: Atlantic Wave Pacific Pounder Sales price $350 $250 Variable cost of goods sold per unit (130) (118) Manufacturing margin per unit $220 $132 Variable selling expense per unit (157) (67) Contribution margin per unit $63 $65 The sales unit volume for the territories and products for the period is as follows: East Coast West Coast Atlantic Wave 2,460 1,230 Pacific Pounder 0 1,230 a. Prepare a contribution margin by sales territory report. Compute the contribution margin ratio for each territory as a whole percent, rounded to two decimal places, if required. Coast to Coast Surfboards Inc. Contribution Margin by Territory East…

Answer 2

Question

Chapter 20, Problem 20.5CP

(1)

To determine

Contribution Margin

Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.

To Prepare: The contribution margin by state report for Company TS.

(2)

To determine

The additional profit for each state, if the sales amount increased by 20% and decrease in advertising expenses.

(3)

To determine

To Identify: Which state will provide the greatest profit return for a $42,200 increasing in advertising expenses?

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 20, Problem 20.5CP

(1)

To determine

Contribution Margin

Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.

To Prepare: The contribution margin by state report for Company TS.

(2)

To determine

The additional profit for each state, if the sales amount increased by 20% and decrease in advertising expenses.

(3)

To determine

To Identify: Which state will provide the greatest profit return for a $42,200 increasing in advertising expenses?

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 20, Problem 20.5CP

(1)

To determine

Contribution Margin

Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.

To Prepare: The contribution margin by state report for Company TS.

(2)

To determine

The additional profit for each state, if the sales amount increased by 20% and decrease in advertising expenses.

(3)

To determine

To Identify: Which state will provide the greatest profit return for a $42,200 increasing in advertising expenses?

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 20, Problem 20.5CP

(1)

To determine

Contribution Margin

Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.

To Prepare: The contribution margin by state report for Company TS.

(2)

To determine

The additional profit for each state, if the sales amount increased by 20% and decrease in advertising expenses.

(3)

To determine

To Identify: Which state will provide the greatest profit return for a $42,200 increasing in advertising expenses?

Answer 6

Chapter 20, Problem 20.5CP

(1)

To determine

Contribution Margin

Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.

To Prepare: The contribution margin by state report for Company TS.

Answer 7

Chapter 20, Problem 20.5CP

(1)

To determine

Contribution Margin

Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.

To Prepare: The contribution margin by state report for Company TS.

Answer 8

(2)

To determine

The additional profit for each state, if the sales amount increased by 20% and decrease in advertising expenses.

Answer 9

(2)

To determine

The additional profit for each state, if the sales amount increased by 20% and decrease in advertising expenses.

Answer 10

(3)

To determine

To Identify: Which state will provide the greatest profit return for a $42,200 increasing in advertising expenses?

Answer 11

(3)

To determine

To Identify: Which state will provide the greatest profit return for a $42,200 increasing in advertising expenses?

Answer 12

Expert Solution & Answer

Answer 13

Expert Solution & Answer

Answer 14

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 15

Ch. 20 - What types of costs are customarily included in...Ch. 20 - Which type of manufacturing cost (direct...Ch. 20 - Which of the following costs would be included in...Ch. 20 - In the variable costing income statement, how are...Ch. 20 - Since all costs of operating a business are...Ch. 20 - Discuss how financial data prepared on the basis...Ch. 20 - Why might management analyze product...Ch. 20 - Explain why rewarding sales personnel on the basis...Ch. 20 - Discuss the two factors affecting both sales and...Ch. 20 - How is the quantity factor for an increase or a...

Solution Summary: The author explains that contribution margin is the excess of manufacturing margin above selling and administrative expenses.

Concept explainers

Videos

The additional profit for each state, if the sales amount increased by 20% and decrease in advertising expenses.

To Identify: Which state will provide the greatest profit return for a $42,200 increasing in advertising expenses?

Want to see the full answer?

Chapter 20 Solutions