Direct Materials 10, Direct Labor 20, Variable Manufacturing overhead 5, Total variable manufacturing cost per unit 35, Fixed manufacturing overhead per year $100,000, Fixed Selling and administrative expense per year $200,000.

Assume that Ajax produces 10,000 items and sells 8,000 items. In this case, the variable cost of goods sold is $280,000. How did it come to $280,000?

The selling price of Ajax's product is $90 per unit. In this case, the contribution margin on the income statement prepared using variable costing is $440,000. How did it come to $440,000?