Answer:
unitary variable cost= $3
contribution margin ratio= 0.4
Explanation:
Giving the following information:
break-even point= $244,000
the selling price= $5 per unit
Fixed costs of $97,600.
First, we need to calculate the contribution margin ratio, we will use the following formula:
Break-even point (dollars)= fixed costs/ contribution margin ratio
244,000= 97,600/contribution margin ratio
contribution margin ratio= 97,600/244,000
contribution margin ratio= 0.4
Now, we can calculate the unitary variable cost:
contribution margin ratio= (selling price - unitary variable cost)/seling price
0.4= (5 - unitary variable cost)/5
2= 5 -unitary variable cost
unitary variable cost= 3
