Gabrick Company sells a product for $80 per unit. Variable costs are $60 per unit, and...
Gabrick Company sells a product for $80 per unit. Variable costs are $60 per unit, and fixed costs are $2,300 per month. The company expects to sell 530 units in September. Calculate the contribution margin per unit, in total, and as a ratio
Homework Answers
Contribution margin per unit
= Selling price per unit – Variable costs per unit
= $80 - $60
= $20 per unit
Total contribution margin
= Contribution margin per unit x Number of units
= $20 x 530
= $ 10,600
Contribution margin ratio
= Contribution / Sales x 100
= $20 / $80 x 100
= 25%
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