Question

The following information is available for Forever Fragrance Company's Southern Territory by salesperson: Garcia Jones Total Sales $30,000 $40,000 $70,000 Variable cost of goods sold 3,600 4,800 8,400 Variable selling expenses: Promotion costs 5,000 8,000 13,000 Sales commissions 4,500 6,000 10,500 What is the contribution margin for Jones? a. $35,200 b. $21,200 c. $40,000 d. $27,200

Answer 1

Contribution Margin is the difference of total Sales and Variable costs.

Contribution Margin for salespersons Garcia and Jones are calculated as below :

So, contribution Margin for Jones is $21200

Option b is correct.