PLUS US Solution Answer 1 Contribution Margin for Current Y

PLUS ?? US

Solution

Answer 1 Contribution Margin for Current Year Sales $2,250,000.00 Less : Variable costs - Direct Materials $1,131,400.00 - Direct Labour $250,000.00 - Manufacturing Overheads [$378000*70%] $264,600.00 - Selling Expenses [$250000 * 40%] $100,000.00 - Administrative Expenses [$270000 * 20%] $54,000.00 Total Variable Costs $1,800,000.00 Contribution Margin for Current Year [Sales - Variable Costs] $450,000.00 Current year Contribution Margin ratio = Contribution Margin / Sales = $450000 / $2250000 = 20% Contribution margin for projected Year = Projected Sales * Contribution Margin % Contribution margin for projected Year = [$2250000 * 110%] * 20% = $24,75,000 * 20% = $4,95,000 Answer 2 Fixed Costs for Current Year Manufacturing Overheads [$378000*30%] $113,400.00 Selling Expenses [$250000 * 60%] $150,000.00 Administrative Expenses [$270000 * 80%] $216,000.00 Total Fixed Costs for Current Year $479,400.00