Contribution Margin Harry Company sells 35,000 units at $26 per unit. Variable costs are $17.42 per...

Contribution Margin

Harry Company sells 35,000 units at $26 per unit. Variable costs are $17.42 per unit, and fixed costs are $126,100.

Determine (a) the contribution margin ratio, (b) the unit contribution margin, and (c) income from operations.

a. Contribution margin ratio (Enter as a whole number.)		%
b. Unit contribution margin (Round to the nearest cent.)	$	per unit
c. Income from operations	$

Solutions

Expert Solution

contribution margin ratio	33%
Unit contribution margin	$8.58 per unit
Income from operations	$174,200

Working:

Contribution margin ratio=contribution margin/Sales

=(8.58/26)=33%

Contribution margin=Sales-Variable cost

=(26-17.42)=$8.58 per unit

Contribution margin at 36000 units=($8.58*35000)=$300,300

Less: Fixed cost=$(126,100)

Income from operations=$174,200

ekkarill92 answered 2 weeks ago

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