Question

Erin Brushwood sells gourmet chocolate chip cookies. The results of her last month of operations are as follows: Sales revenue $ 55,194 Cost of goods sold (all variable) 28,232 Gross margin 26,962 Selling expenses (20% variable) 8,908 Administrative expenses (60% variable) 11,516 Operating income $ 6,538

Answer 1

Answer:

A) 32,090 cookies

B) $ 0.5665336

C)   32.938%

Questions:

A) If Erin sells her cookies for $1.72 each, how many cookies did she sell during the month?

B) Contribution margin per cookie

C) Contribution margin ratio

Explanation:

A) sales revenue / sale price per unit

55,194 / 1.72 = 32.089,53

B) and C)

variable cost:

manufacturing                        28,232

selling 8,908 x 20% =                1.781,6‬

administrative 11,516 x 60% = 6.909,6‬  

   Total variable cost:             37.014,2‬

Contribution Margin: 55,194 - 37,014.2 = 18.179,8‬

Contribution Margin Ratio 18,179.8 / 55,194 = 0,329380 = 32.938%

Contribution Margin per cookie:

$1.72 x 32.938% = 0,5665336