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Quaker Corporation sold 6,600 units of its product at a price of $42.40 per unit. Total variable cost per unit is $19.25, consisting of $10.15 in variable production cost and $9.10 in variable selling and administrative cost. Compute contribution margin for the company.

Respuesta :

TomShelby

Answer:

The Unit CM will be 23.15

The total contribution will be 152,790

Explanation:

[tex]Sales \: Revenue - Variable \: Cost = Contribution \: Margin[/tex]

42.40  Sales Revenue

(19.25) Variable cost

23.15   Contribution Margin  per unit

This is the amount per unit after paying the variable cost.

[tex]Contribution \: per \: unit \times units \: sold = Total \: Contribution \: Margin[/tex]

[tex]23.15 \times 6,600 = 152.790[/tex]

This will be the complete contribution generated for the product. It will be used to pay the fixed cost and the remainder will be operating gains.

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