1. Assume (1) total sales are $300,000, (2) the direct labor cost of $40,000 is 25% of total conversion costs and 40% of total prime costs, (3) the total selling and administrative expense is $62,000, (4) the only variable selling and administrative expense is sales commissions of 6% of sales, (5) all manufacturing overhead costs are fixed costs, and (6) there are no beginning or ending inventories. What is the total contribution margin?

2. Assume that a manufacturing company incurred the following costs:

Direct labor	$	90,000
Advertising	$	40,000
Factory supervision	$	37,000
Sales commissions	$	15,000
Depreciation, office equipment	$	4,000
Indirect materials	$	5,000
Depreciation, factory building	$	20,000
Administrative office salaries	$	1,000
Utilities, factory	$	2,500
Direct materials	$	107,000
Insurance, factory	$	5,000
Property taxes, factory	$	7,000

3,

Assume the following information for a merchandising company:

Sales	$	490,000
Variable selling expenses	$	25,000
Cost of goods sold	$	350,000
Fixed administrative expenses	$	50,000
Fixed selling expenses	$	40,000
Variable administrative expenses	$	5,000

What is the company's contribution margin?

What is the total amount of manufacturing overhead?