Question

Contribution Margin Harry Company sells 28,000 units at $23 per unit. Variable costs are $19.32 per unit, and fixed costs are $47,400. Determine (a) the contribution margin ratio, (b) the unit contribution margin, and (c) income from operations. a. Contribution margin ratio (Enter as a whole number.) 16 V per unit 3.68 b. Unit contribution margin (Round to the nearest cent.) c. Income from operations Feedback V Check My Work a. Unit contribution margin divided by unit sales price equals contribution margin ratio. b. Unit sales price minus unit variable costs equals unit contribution margin. c. Contribution margin minus fixed costs equals income from operations.

Answer 1

Contribution margin=Sales-Variable cost  

=(23-19.32)=$3.68 per unit

Contribution margin ratio=Contribution margin/Sales

=(3.68/23)=16%

Total contribution margin=(3.68*28000)=$103040

Less:Fixed expenses=47400

Income from operations=55640

Contribution margin ratio	16%
Unit Contribution margin	$3.68 per unit
Income from operations	$55640