Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
Selling price $ 91
Units in beginning inventory 0
Units produced 3,800
Units sold 3,230
Units in ending inventory 570
Variable costs per unit:
Direct materials $ 22
Direct labor $ 32
Variable manufacturing overhead $ 5
Variable selling and administrative expense $ 3
Fixed costs:
Fixed manufacturing overhead $ 60,900
Fixed selling and administrative expense $ 2,400
Required:
1. The total contribution margin for the month under variable costing is .
Multiple Choice:
O $32,770
O $103,360
O $30,370
O $93,670

The total contribution margin for the month under variable costing is $103,360

Explanation:

Variable Costing Considers only variable manufacturing costs in the calculation of product costs. Fixed Manufacturing Costs are regarded as period cost using this method.

Sales ( $ 91 × 3,230 )                                                                        293,930

Less Cost of Goods Sold

Opening Stock                                                                    0

Add Cost of Goods Manufactured

Direct materials ( $ 22 × 3,800)                                    83,600

Direct labor ( $ 32 × 3,800)                                          121,600

Variable manufacturing overhead ( $ 5 × 3,800)         19,000

Less Closing Stock ( $ 22+$ 32+ $ 5) × 570              ( 33,630)    (190,570)

Contribution                                                                                       103,360

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