Question

A division sold 230000 calculators during 2020: Sales $2300000 Variable costs: Materials $437000 Order processing 172500 Billing labor 126500 Selling expenses 69000 Total variable costs 805000 Fixed costs 1000000 How much is the unit contribution margin?

Answer 1

Answer:

the unit contribution margin is 65%

Explanation:

Unit contribution margin = Contribution / Selling Price × 100

                                         =($2300000-$805000) / $2300000 × 100

                                         = $1,495,000 / $2,300,000 × 100

                                         = 65%

Answer 2

Answer: $6.50

Explanation:

The Contribution Margin is known as the difference between the Selling price and the Variable cost.

That means that to calculate it we will subtract the variable costs from the sales in the following manner,

= $2,300,000 - $805,000

= $1,495,000

The Contribution Margin total amount is $1,495,000.

To find the unit Contribution Margin we will then divide it by the total number if units.

It is said that 230,000 calculators were sold during 2020 so calculating would be,

= 1,495,000/230,000

= $6.5

The unit contribution margin is $6.50