per unit
Unit cost of goods sold
$
97
per unit
Variable selling expense per unit
$
12
per unit
Total fixed selling expense
$
7,300
Variable administrative expense per unit
$
8
per unit
Total fixed administrative expense
$
15,300
Cost of goods sold is a variable cost in this company.
The gross margin for June is:
A) $242,600
B) $148,800
C) $124,800
D) $102,200
Answer: B
Explanation:
Sales (1,200 units × $221 per unit)
$
265,200
Cost of goods sold (1,200 units × $97 per unit)
116,400
Gross margin
$
148,800
Difficulty: 2 Medium
Topic: Using Different Cost Classifications for Different Purposes
Learning Objective: 01-06 Prepare income statements for a merchandising company using the traditional and contribution formats.
Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
270) Delongis Corporation, a merchandising company, reported the following results for June:
Number of units sold
1,200
units
Selling price per unit
$
221
per unit
Unit cost of goods sold
$
97
per unit
Variable selling expense per unit
$
12
per unit
Total fixed selling expense
$
7,300
Variable administrative expense per unit
$
8
per unit
Total fixed administrative expense
$
15,300
Cost of goods sold is a variable cost in this company.
The contribution margin for June is:
A) $148,800
B) $102,200
C) $218,600
D) $124,800
Answer: D
Explanation:
Sales (1,200 units × $221 per unit)
$
265,200
Variable expenses:
Cost of goods sold (1,200 units × $97 per unit)
$
116,400
Variable selling expense (1,200 units × $12 per unit)
14,400
Variable administrative expense (1,200 units × $8 per unit)
9,600
140,400
Contribution margin
$
124,800
Difficulty: 2 Medium
Topic: Using Different Cost Classifications for Different Purposes
Learning Objective: 01-06 Prepare income statements for a merchandising company using the traditional and contribution formats.
Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
271) Salomon Marketing, Inc., a merchandising company, reported sales of $1,555,500 and cost of goods sold of $1,025,100 for December. The company's total variable selling expense was $96,900; its total fixed selling expense was $34,300; its total variable administrative expense was $71,400; and its total fixed administrative expense was $100,100. The cost of goods sold in this company is a variable cost.
The contribution margin for December is:
A) $530,400
B) $227,700
C) $1,252,800
D) $362,100
Answer: D
Explanation:
Sales
$
1,555,500
Variable expenses:
Cost of goods sold
$
1,025,100
Variable selling expense
96,900
Variable administrative expense
71,400
1,193,400
Contribution margin
$
362,100
Difficulty: 1 Easy
Topic: Using Different Cost Classifications for Different Purposes
Learning Objective: 01-06 Prepare income statements for a merchandising company using the traditional and contribution formats.
Bloom's: Apply
AACSB: Analytical Thinking
AICPA: BB Critical Thinking; FN Measurement
272) Salomon Marketing, Inc., a merchandising company, reported sales of $1,555,500 and cost of goods sold of $1,025,100 for December. The company's total variable selling expense was $96,900; its total fixed selling expense was $34,300; its total variable administrative expense was $71,400; and its total fixed administrative expense was $100,100. The cost of goods sold in this company is a variable cost.