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Vaughn Manufacturing produces flash drives for computers, which it sells for $25 each. Each flash drive...

Vaughn Manufacturing produces flash drives for computers, which it sells for $25 each. Each flash drive costs $10 of variable costs to make. During April, 1000 drives were sold. Fixed costs for March were $2 per unit for a total of $1000 for the month. How much is the contribution margin ratio?

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Answer:

Contribution margin per unit = Sale price – Variable cost

                                                       = 25 – 10

                                                      = $15

Contribution margin ratio = Contribution margin per unit/Sale price per unit *100

                                               = 15/25 *100

                                               = 60%

ekkarill92 answered 1 year ago
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