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Do you want to rest updates now of try to mework 0 Ched Suppose it sells each birdbath for $25. Required: 1. Calculate the un
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Answer #1

1.

Sales price per unit - Variable cost per unit = Unit contribution margin
25 - 19.5 = 5.5 per birdbath
Unit contribution margin / Sales price per unit = Contribution margin ratio
5.5 / 25 = 22%

2.

Sales revenue 35000 [1400*25]
Variable costs 27300 [1400*19.5]
Contribution Margin 7700
Fixed costs 4180
Net operating income 3520

Workings:

Direct Materials 1500
Direct Labor 7500
Utilities 550
Maintenance 200
Total variable cost 9750
No of units 500
Variable cost per unit 19.50
Utilities 100
Supervisor's salary 3000
Maintenance 280
Depreciation 800
Total fixed cost 4180
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