Note 3 seems to have an error: Material cost for DW is $70 and MW is $100 to deduct material cost from sales to get the contribution should have been: (200-70)+(350-100)? and not what is printed. Please confirm.
Contribution is sales less variable costs. The saving in material costs is dealt with separately in note 5 of the answer. So note 3 is looking at the lost contribution ignoring materials. So for DW this is 200 – 50 = $150 and for MW it is 350 80 = $270