Answer:
(a) Contribution margin ratio = 0.39, or 39%
(b) the unit contribution margin = $7.4 per unit
(c) income from operations = $164,470
Explanation:
Total revenue = 37,000 × $19 = $703,000
Total variable cost = 37,000 × $11.59 = $428,830
Margin = $703,000 - $428,830 = $274,170
(a) the contribution margin ratio
Contribution margin ratio = $274,170/$703,000 = 0.39, or 39%
(b) the unit contribution margin
Unit contribution margin = $19 - $11.59 = $7.4 per unit
(c) income from operations
Income from operations = $274,170 - $109,700 = $164,470
