00:01
In this example, we're given sales revenue, variable costs, fixed costs, and we're also told our contribution margin per unit is $77.
00:10
Given this information, how can i find operating income, units sold, and the contribution margin ratio? well, first off, contribution margin per unit would be the sales price per unit minus the variable cost per unit.
00:29
When i look at the sales revenue in relation to the variable costs, i see that the variable costs are 50 % of the sales revenue.
00:38
This must mean that the sales price is double what the variable expenses are, 154, and that the variable costs per unit are 77 to get a contribution margin ratio of $77.
00:56
Let's solve for units sold first.
01:00
If it's $154 per unit, per year, you, you know, $17 ,000 ,000.
01:03
Unit and i have sales revenue of $1 ,000 ,000, i can divide that by what i make for just one unit to find that i sold 14 ,000 units.
01:20
The difference between contribution margin ratio and contribution margin per unit is the ratio is over the selling price per unit to put this as a percent...