Saints Company sells 50,000 units at $25 per unit. Fixed costs are $70,000, and income from...
Saints Company sells 50,000 units at $25 per unit. Fixed costs are $70,000, and income from operations is $380,000. Determine: A) Variable Cost Per Unit, B) Unit Contribution Margin, C) Contribution Margin Ratio.
Homework Answers
Contribution Margin=Fixed cost+Income from operations
=(70,000+380,000)=$450,000
Hence Contribution Margin per unit=(450,00/50,000)=$9 per unit
Contribution Margin ratio=Contribution Margin/Sales
=9/25=36%
Contribution margin=Sales-Variable cost
Variable cost=(25-9)=$16 per unit
Hence:
A) Variable Cost Per Unit=$16 per unit
B) Unit Contribution Margin=$9 per unit
C) Contribution Margin Ratio=36%
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