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Q:
The management of Gilmartin Corporation, a manufacturing company, has provided the following data for February:
Sales
$550,000
variable production expense
$104,000
Fixed production expense
$122,000
Variable selling expense
$24,000
Fixed selling expense
$102,000
Variable administrative expense
$56,000
Fixed administrative expense
$116,000
The contribution margin for February was:
1. $366,000
2. $210,000
3. $26,000
4. $324,000
Explain the circumstance under which the Sanchez Company should employ each of the two manufacturing methods.
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