In: Accounting
The records of the Dodge Corporation show the following results
for the most recent year:
Sales (16,200 units) | $ | 307,800 | |
Variable expenses | 162,000 | ||
Net operating income | 64,800 | ||
Given these data, the unit contribution margin was:
$4
$5
$19
$9
Solution
Unit Contribution Margin = Selling price per unit - Variable Cost per unit
Selling price per unit = Sales / Number of units
= $ 307,800/ 16,200
= $ 19
Variable cost per unit = Variable cost / Number of units
= $ 162,000 / 16,200
= $ 10
Unit contribution margin = $ 19 - $ 10 = $ 9