Beta Corp reported the following:
Revenues $2,500
Variable manufacturing costs $ 300
Variable nonmanufacturing costs $ 480
Fixed manufacturing costs $ 350
Fixed nonmanufacturing costs $ 270
Required:
a. Compute contribution margin.
b. Compute gross margin.
c. Compute operating income.
Answer:
a. Contribution margin $2,500 − $300 − $480 = $1,720
b. Gross margin $2,500 − $300 − $350 = $1,850
c. Operating income $2,500 − $300 − $480 − $350 − $270 = $1,100
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