Answer:
The contribution margin per pound for K1, S5 and G9 is 16 per pound, 9 per pound , and 11 per pound respectively
Explanation:
Contribution margin : The contribution margin shows a difference between selling price and variable cost per pound
Mathematically,
Selling price per pound - Variable cost per pound = Contribution margin
Now, apply this equation for three products
For Product K1 = $160 - 96 = 64
For Product S5 = $112 - 85 = 27
For Product G9 = $210- 144 = 66
Now for computing the contribution margin per pound, divide each product contribution margin with each product pound
Mathematically,
For Product K1 = Contribution margin ÷ Pound
= 64 ÷ 4
= 16 per pound
For Product S5 = Contribution margin ÷ Pound
= 27 ÷ 3
= 9 per pound
For Product G9 = Contribution margin ÷ Pound
= 66 ÷ 6
= 11 per pound
Thus, the contribution margin per pound for K1, S5 and G9 is 16 per pound, 9 per pound , and 11 per pound respectively.
