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Makovka662 [10]
3 years ago
11

RJ Miller Manufacturing Company produces a product that sells for $120. A selling commission of 10% of the selling price is paid

on each unit sold. Variable manufacturing costs are $60 per unit. Fixed manufacturing costs are $20 per unit based on the current level of activity. Fixed selling and administrative costs are $16 per unit. The contribution margin per unit is:
Business
1 answer:
djverab [1.8K]3 years ago
6 0

Answer:

$48

Explanation:

Contribution = Sales - Variable Costs

where,

Sales = $120

Variable Costs = $120 x 10% + $60 = $72

therefore,

Contribution = $120 - $72 = $48

The contribution margin per unit is: $48

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2 years ago
A firm sells a product in a purely competitive market. The marginal cost of the product at the current output of 200 units is $4
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Answer:

It must shut down

Explanation:

Even at the lower average variable cost, which is 3.50 dolllar will be lossing money given a market price of 3.00 dollar

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3 years ago
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3 years ago
A cement manufacturer has supplied the following data: Tons of cement produced and sold 275,000 Sales revenue$979,000 Variable m
tresset_1 [31]

Answer:

65%

Explanation:

Given that

Sales = $979,000

Variable manufacturing expense = $232,000

Variable selling and administrative expense = $110,650

The computation of contribution margin ratio is shown below:-

Contribution margin ratio = (Sales - Variable manufacturing expense - Variable selling and administrative expense) × 100 ÷ Sales

= ($979,000 - $232,000 - $110,650) × 100 ÷ $979,000

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3 years ago
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