Total contribution margin = (Selling price - Variable cost per unit ) * units
Variable cost per unit = Direct labor + Direct material + Variable Factory overhead + Variable selling expenses + Variable administrative expenses
Manufacturing cost - Direct material = Factory overhead + Direct labor
Let direct labor = x
Factory overhead = 1.5x
$160 - $60 = x + 1.5x
$100 = 2.5x
x = $40
Direct labor = $40
Factory overhead = $60
Variable factory overhead = $60 * 2/3
= $40
Variable cost per unit = $40 + $60 + $40 + $18 + $36
= $194
Total contribution margin = ($250 - $194) * 7,000 units
= $392,000
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