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3 years ago

PA2.

Business

1 answer:

luda_lava [24]3 years ago

3 0

Answer:

Contribution margin per unit = $250

Contribution margin ratio = 55.56%

Explanation:

The computations are shown below:

Contribution margin per unit = Sale price per unit - variable cost per unit

= $450 - $200

= $250

Contribution margin ratio would be

= (Contribution margin per unit) ÷ (Sale price per unit) × 100

= ($250) ÷ ($450) × 100

= 55.56%

And, the contribution margin income statement for may month is presented below:

Sales (225 bikes × $450) $101,250

Less: Variable cost (225 bikes × $200) ($45,000)

Contribution margin $56,250

Less: Fixed expenses per month ($40,000)

Net income $16,250

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