Question

In: Accounting

Bluegill Company sells 13,900 units at $160 per unit. Fixed costs are $111,200 and income from...

Bluegill Company sells 13,900 units at $160 per unit. Fixed costs are $111,200 and income from operations is $1,000,800. Determine the following: Round the contribution margin ratio to two decimal places.

a. Variable cost per unit $
b. Unit contribution margin $ per unit
c. Contribution margin ratio %

Solutions

Expert Solution

Income From Operation = $             10,00,800
Add: Fixed Cost = $               1,11,200
Contribution $             11,12,000
Sales (13,900 X $ 160) $             22,24,000
Less: Contribution $             11,12,000
Variable Cost $             11,12,000
Variable Cost Per unit = $ 1,112,000 / 13,900 units= $                           80
Unit Contribution Margin = $ 1,112,000 / 13,900 units= $                           80
Contribution Margin Ratio = Contribution / Sales
Contribution Margin Ratio = $ 80 / $ 160 =                            0.50
Contribution Margin Ratio = 0.50 or 50%
Answers
Variable Cost per unit = $                           80
Unit Contribution margin = $                           80
Contribution Margin Ratio =   50%

ekkarill92 answered 1 year ago
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