Answer the following questions using the information below: Stober Company produ

Question

Answer the following questions using the information below: Stober Company produces a specialty item. Management has provided the following information: Actual sales Budgeted production Selling price 60,000 units 50,000 units $40.00 per unit Direct material costs Variable manufacturing overhead Variable administrative costs Fixed manufacturing overhead $10.00 per unit $3.00 per unit $5.00 per unit $4.00 per unit 9) What is the total throughput contribution? B) $1,800,000 9) C) $1,500,000 A) $1,620,000 E) none of the above. D) $1,380,000

Explanation / Answer

Answer: B)

Throughput contribution = $1,800,000

Working notes for the above answer:

Acutual sales(A)

60000 units

Sale price (B)

40

less: Dairct material   (,C)

-10

Net (D)

30

throughput contribution
=A*D

1800000

Or it can be calculated as under

60,000 x ($40.00 - $10.00)

= $1,800,000

Acutual sales(A)

60000 units

Sale price (B)

40

less: Dairct material   (,C)

-10

Net (D)

30

throughput contribution
=A*D

1800000

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