Question
In: Accounting
Contribution Margin Molly Company sells 23,000 units at $46 per unit. Variable costs are $25.76 per...
Contribution Margin
Molly Company sells 23,000 units at $46 per unit. Variable costs are $25.76 per unit, and fixed costs are $181,600.
Determine (a) the contribution margin ratio, (b) the unit contribution margin, and (c) operating income.
| a. Contribution margin ratio (Enter as a whole number.) | % | |
| b. Unit contribution margin (Round to the nearest cent.) | $ | per unit |
| c. Operating income |
Solutions
Expert Solution
| 1) | Contribution margin ratio | ||
| Contribution margin per unit | 20.24 | ||
| Selling price per unit | 46 | ||
| Contribution margin ratio | 44.00% | ||
| 2) | Contribution margin per unit | ||
| Selling price | 46 | ||
| Less: VC per room | 25.76 | ||
| Contribution margin per unit | 20.24 | ||
| Contribution margin ratio | 44% | ||
| 3) | Calculate total fixed cost | ||
| Total sales | 1,058,000 | ||
| Less: VC | 592,480 | ||
| Contribution margin | 465,520 | ||
| LESS: Fixed cost | 181,600 | ||
| Net INCOME | 283,920 | ||
ekkarill92 answered 1 year agoRelated Solutions
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Price, Variable Cost per Unit, Contribution Margin, Contribution
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For each of the following independent situations, calculate the
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sells 95,000 units and has fixed cost of $349,700. The variable
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and has fixed cost of $391,500. Next year, Sooner expects to...
Price, Variable Cost per Unit, Contribution Margin, Contribution Margin Ratio, Fixed Expense For each of the...
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Note: Round to the nearest cent.
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