Question

The following data are for Trendy Fashion Apparel:

	North	South
Sales volume (units):
Blouses	5,070	4,042
Skirts	3,082	7,509
Sales price per unit:
Blouses	$21	$17
Skirts	$16	$17
Variable cost per unit
Blouses	$6	$6
Skirts	$12	$12

Determine the contribution margin for the following:

a. Skirts	$
b. The South Region	$

Answer 1

a.

	North	South	Total
Selling price per unit (i)	16	17
Variable cost per unit (ii)	12	12
Contribution margin per unit (iii) = (i)-(ii)	4	5
Number of units sold (iv)	3,082	7,509
Total contribution margin (iii) x (iv)	12,328	37,545	49,873

Total contribution margin from Skirts = $49,873

b.

	Blouses	Skirts	Total
Selling price per unit (i)	17	17
Variable cost per unit (ii)	6	12
Contribution margin per unit (iii) = (i)-(ii)	11	5
Number of units sold (iv)	4,042	7,509
Total contribution margin (iii) x (iv)	44,462	37,545	82,007

Total contribution margin from South region = $82,007

a. Skirts	$49,873
b. The South Region	$82,007