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.
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Query on December 2009 question 5 relevant costing: Stay Clean
5y ago#1There is no error.
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
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