Question

Determine the missing amounts. (Round answers to 0 decimal places, e.g. 1,225.)

Answer 1

Answer:

Selling Price_Variable Costs_Contribution Margin_CM Ratio

1. $640 _________$352 _______$288 __________45%

2. $300_________$207 _______ $93 __________69%

3. $1,300 _______ $975 _______$325 __________25 %

Explanation:

As per given data

Selling Price_Variable Costs_Contribution Margin_CM Ratio

1. $640 _________$352 _______$288 $ ________45%

2. $300_________$207 _______ $93 __________69%

3. $1,300 _______ $975 _______$325 __________25 %

(a)

Unit Contribution margin = Unit selling price - Unit Variable cost

Unit Contribution margin = $640 - $352 = $288

(b)

Contribution margin Ratio = Unit Contribution margin / Unit selling price = $288 / $640 = 0.45 = 45%

(c)

Unit Contribution margin = Unit selling price - Unit Variable cost

$93 = $300 - Unit variable cost

Unit variable cost = $300 - $93 = $207

(d)

Contribution margin Ratio = Unit Contribution margin / Unit selling price = $207 / $300 = 0.69 = 69%

(e)

25 = $325 / Unit selling price

Unit selling price = $325 / 25% = $1,300

(f)

$325 = $1,300 - Unit Variable cost

Unit Variable cost = $1,300 - $325 = $975