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Madison Corporation sells three products (M, N, and O) in the following sales mix: 3:1:2. Unit price and cost data are: M N O Unit sales price $ 7 $ 4 $ 6 Unit variable costs 3 2 3 Total fixed costs are $340,000. The contribution margin per composite unit for the current sales mix (round to the nearest cent) is:

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Answer:

M = $4

N = $2

O = $3

Explanation:

Contribution margin = Sales - Variable Costs

Therefore,

                                        M           N             O

Sales                               $ 7        $ 4           $ 6

Less Variable costs      ($ 3)      ($ 2)         ($ 3)

Contribution                   $4        $2            $3

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