Sales Office Payroll (receptionist & bookeeper) Advertising Remodeling of Pat's House Office remodeling Sales commissions Interest expense $500,000 35,000 10,000 9,500 4,500 235,000 90,000 Now that Ray knows the fixed costs, what is the contribution margin for 20XY? Ray's assumption's for 20XY: 1) all recurring costs will be the same for 20XY, 2) the 5,000 policies will all be renewed for 20XY, and 3) he will have to pay the agreed upon buy-out fee.