In: Accounting
If variable cost of goods sold totaled $66,440 for the year (16,610 units at $4 each) and the planned variable cost of goods sold totaled $99,330 (14,190 units at $7 each), the effect of the unit cost factor on the change in contribution margin is:
a.$9,680 increase
b.$49,830 decrease
c.$9,680 decrease
d.$49,830 increase
A |
Planned variable cost |
$ 7.00 |
B |
Actual Variable cost |
$ 4.00 |
C = A - B |
Increase in Unit contribution |
$ 3.00 |
D |
Actual Units |
16,610 |
E = C x D |
Effect of unit cost on contribution margin |
$ 49,830.00 |