The parts or components used in the production of a product contribute to its contribution margin (per unit) and contribution margin in dollars. Other factors that affect the contribution margin include the selling price (e.g. $5.27) and the quantity sold. During the month, fixed costs were $21,600 and variable costs were $35.
Added by Mary T.
Close
Step 1
First, let's calculate the contribution margin per unit. The contribution margin per unit is the selling price per unit minus the variable cost per unit. In this case, the variable cost per unit is $35. So, if we have the selling price per unit, we can calculate Show more…
Show all steps
Your feedback will help us improve your experience
Adi S and 86 other Principles of Accounting educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Recommended Videos
Calculate the breakeven point and contribution margin Breakeven point Fixed cost Contribution margin Selling price per unit Variable cost per unit units
Adi S.
Contribution margin ratio can be calculated in all of the following ways except: a. 1 - Variable cost ratio. b. Contribution margin per unit / price. c. Fixed costs / Contribution margin per unit. d. Total contribution margin / Total sales. e. All of these choices are correct.
The break-even point is estimated by : a. multiplying revenue per unit times the quantity sold. b. dividing fixed contribution per unit by variable costs. c. multiplying fixed costs by contribution per unit. d. dividing fixed costs by contribution per unit. e. dividing variable costs by fixed costs.
Lottie A.
Recommended Textbooks
Horngren’s Cost Accounting
Cost Accounting A Managerial Emphasis
Principles of Accounting Volume 1: Financial Accounting
Watch the video solution with this free unlock.
EMAIL
PASSWORD