Problem 3-30: Contribution margin, decision making. Given: McCarthy Men's Clothing's revenues and cost data for 2014 are as follows: Revenues $500,000 Cost of Goods Sold (50% of Sales) 0.50 250,000 Gross Margin W Operating Costs: Salaries (xed) $160,000 Sales Commission (11% of Sales) 55,000 Depreciation of Equipment and Fixtures 15,000 Store Rent ($4,000 per month) 48,000 Other Operating Costs 40,000 318,000 Operating Income (Loss) WET Mr. McCarthy, the owner of the store, is unhappy with the operating results. An analysis of "Other Operating Costs" reveals that it includes $35,000 of variable costs, which vary with sales volume, and $5,000 of fixed costs. 1. Compute the contribution margin of McCarthy Men's Clothing. Long Way: Sales $600,000 Cost of Goods Sold 300,000 $300,000 Sales $500,000 Less: Variable Costs Cost of Goods Sold 0.500 $250,000 Sales Commissions 0.110 55,000 Other Operating Costs 0.070 35,000 340,000 Total Contribution Margin 0.320 $160,000 \"$0? Saes W 50%