Question

A division sold 200,000 calculators during the year. Their data for the division is below. How much is the unit contribution margin? *

Answer 1

Answer:

Unit Contribution Margin = $6.50

Missing Problem Statement:

Sales          $2,000,000

Variable costs:  

Materials                    $380,000

Order processing   $150,000

Billing labor                  $110,000

Selling expenses    $60,000

Total variable costs $700,000

Fixed costs               $1,000,000

Step-by-step explanation:

Given : Total number of calculators sold = 200,000

First we will find the contribution margin for the whole sale, so:

Contribution Margin = Sales - Variable Cost

Contribution Margin = 2000000-700000

Contribution Margin =$ 1,300,000

Now for unit contribution margin :

Unit Contribution Margin = $\frac{Contribution.Margin}{Total.number.of.Calculators.Sold}$

Unit Contribution Margin =$\frac{1300000}{200000}$

Unit Contribution Margin = $6.50