Answer:
a. Manufacturing margin $
Sales 450,000
Less: Fixed manufacturing cost 70,000
Manufacturing margin 380,000
b, Contribution margin $
Sales 450,000
Less: variable costs:
Variable cost of goods sold 240,000
Variable selling and administrative expenses 52,000
Contribution margin 158,000
c. Income from operations $
Contribution margin 158,000
Less: Fixed manufacturing cost 70,000
Fixed selling and administrative expenses 35,000
Income from operations 53,000
Explanation:
Manufacturing margin is the excess of sales over fixed manufacturing cost.
Contribution margin is the excess of sales over total variable costs.
Income from operation is the excess of contribution margin over total fixed costs.
