Alexis Co. reported the following information for May: What is the contribution

Question

Alexis Co. reported the following information for May: What is the contribution margin for ? 6.) Trago Company manufactures a single product and has a JIT policy that ending inventory must equal 10% of the next month's sales. It estimates that May's ending inventory will consist of 29,000 units. June and July sales are estimated to be 290,000 and 300,000 units, respectively. Trago assigns variable overhead at a rate of S2.80 per unit of production. Fixed overhead equals S410.000 per month. Compute the number of units to be produced and use this amount to compute the total budgeted overhead that would appear on the factory overhead budget for month of June.

Explanation / Answer

5) contribution margin = revenue - variable expenses

revenue 4100*700=2870000

variable expenses= 4100*480=1968000

contribution margin= 2870000-1968000= 902000

answer is B) 902000

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