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3 years ago

14

PB2.

1 answer:

olga55 [171]3 years ago

5 0

Answer:

The contribution margin per unit for the 18-inch blade.

Break even in units = Fixed cost/Contribution per unit

= 85,000/11 (15-4)

= 7,728 unit (round off)

The contribution margin ratio of the 18-inch blade.

Total contribution margin (CM) is calculated by subtracting total variable costs TVC from total sales TSP. Contribution margin per unit equals sales price per unit SP minus variable costs per unit VC . It is used in calculating a break even point of a business. Contribution margin ratio tells us how much contribution towards fixed cost is generate by selling a unit.

CM ratio = $ 11/ $ 15 *100= 73.33%

(Variable cost = 15 -4 = 11 )

Contribution margin income statement for the month of January.

Sales $ 180,000

Variable cost ($ 48,000)

Gross profit $ 132,000

Fixed Cost ($ 85,000)

Net Profit $ 47,000

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