Answer:
Percentage decrease= 21.86%
Step-by-step explanation:
Giving the following information:
Selling price per unit= $2.65
Current variable cost= $0.82
Increase in variable cost= $0.4
<u>To calculate the unitary contribution margin, we need to use the following formula:</u>
Unitary contribution margin= selling price - unitary variable cost
Unitary contribution margin= 2.65 - 0.82
Unitary contribution margin= $1.83
New contribution margin= 2.65 - 1.22
New contribution margin= $1.43
<u>Finally, the percentage decrease:</u>
<u></u>
Percentage decrease= [1 - (1.43/1.83)]*100
Percentage decrease= 21.86%
