Question
Debbies Bakery Company (DBC) has prepared the following traditional 2012 income statement: Sales Revenues $1,000,000 Cost of goods sold 400,000 Gross Margin 600,000 Selling and
Debbies Bakery Company (DBC) has prepared the following traditional 2012 income statement: Sales Revenues $1,000,000 Cost of goods sold 400,000 Gross Margin 600,000 Selling and Administrative Expenses 350,000 Net Income $ 250,000 You determine that cost of goods sold, selling and administrative costs are variable and fixed expenses as follows: Variable Fixed Total Cost of goods sold $300,000 $100,000 $400,000 Selling expenses 200,000 50,000 250,000 Administrative expense 25,000 75,000 100,000 Total VC $525,000 What is the 2012 contribution margin for DBC? a) $250,000 b) $600,000 c) $475,000 d) $700,000 e) $775,000 Please show me step by step calculations
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