Question: The Chair Division currently purchases the cushions for $30 from an outside vendor. The Cushion Division manufactures upholstered seat cushions that are sold to

The Chair Division currently purchases the cushions for ( $ 30 ) from an outside vendor. The Cushion Division manufactures equirement 1. Determine the total contribution margin for Greco Company for the quarter.

The Chair Division currently purchases the cushions for $30 from an outside vendor. The Cushion Division manufactures upholstered seat cushions that are sold to customers outside the company. The Chair Division currently sells 1,100 chairs per quarter, and the Cushion Division is operating at capacity, which is 1,100 cushions per quarter. The two divisions report the following information: Chair Division Sales Price per Chair Variable Cost (other than cushion) Variable Cost (cushion) Contribution Margin per Chair $ 110 40 30 $ 40 Cushion Division Sales Price per Cushion Variable Cost per Cushion Contribution Margin per Cushion $ 34 8 26 Requirement 1. Determine the total contribution margin for Greco Company for the quarter. Chair Division Cushion Division Total Number of units X Contribution margin per unit X X 11 Total contribution margin

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