International Imports is a merchandising Firm.Last year they reported sales of $674,500 and cost of goods sold of $404,700.The company's total variable selling and administrative expense was $60,705,and fixed selling and administrative expense was $53,960.The total contribution margin for the firm is
A)$209,095.
B)$613,795.
C)$559,835.
D)$215,840.

Question

Quizplus · Accepted Answer

The contribution margin can be calculated by subtracting the total variable costs from the total sales revenue.

Total sales revenue = $674,500
Cost of goods sold = $404,700
Total variable selling and administrative expense = $60,705

Total variable costs = Cost of goods sold + Total variable selling and administrative expense 
Total variable costs = $404,700 + $60,705 = $465,405

Contribution margin = Total sales revenue - Total variable costs 
Contribution margin = $674,500 - $465,405 = $209,095

Therefore, the total contribution margin for International Imports is $209,095. The correct answer is choice A.

International Imports Is a Merchandising Firm