Question

This Question: 20 pts 2 of 7 (6 complete) Complete the table below for the missing amounts. |(Click the icon to view the table.) Compute the missing information, starting with scenario A, then for scenarios B and C. A B C Number of units 6,674 units units 2,453 units $ 260 $ 160 56 3,536 Sale price per unit Variable costs per unit Contribution margin per unit Total contribution margin $ 78 $ 2,717,520 Contribution margin ratio % % 35 %

Answer 1

The following is Marginal cost statement and the blanks are filled

Particulars	A	B	C
Number of Units	6,674 units	26,130 units	2,453 units
Sales price per unit	$          260	$             160	$        5,440
Variable Cost per unit	$         182	$               56	$         3,536
Contribution margin per unit	$           78	$            104	$        1,904
Total Contribution Margin	$ 5,20,572	$     27,17,520	$ 46,70,512
Contribution Margin ratio	30%	65%	35%

Formula for each items are as folllows:-

1. Sales price per unit = Contribution margin per unit + Variable cost per unit

2. Variable cost per unit = Sales price per unit - Contribution margin per unit

3. Contribution margin per unit = Sales price per unit - Variable cost per unit

4. Total Contribution Margin = Contribution margin per unit * Number of units

5. Contribution Margin ratio = Total Contribution Margin / ( Sales price per unit * Number of units)*100

6. Number of units = Total Contribution Margin / Total Contribution Margin.

Note:- In case of A Scenario:-

Variable cost per unit = Sales price per unit - Contribution margin per unit

= $ 260 - $ 78 = $ 182.

Total Contribution Margin = Contribution margin per unit * Number of units

= $ 78* 6674 = $ 5,20,572.

Contribution Margin ratio = Total Contribution Margin / ( Sales price per unit * Number of units)*100

= $ 5,20,572 / ( $ 260* 6674 units ) =  $ 5,20,572 / $ 17,35,240 * 100 = 30%

Note:- In case of B Scenario:-

Contribution margin per unit = Sales price per unit - Variable cost per unit

= $ 160 - $ 56 = $ 104.

Number of units = Total Contribution Margin / Total Contribution Margin.

= $ 27,17, 520 / $ 104 = 26,130 units.

Contribution Margin ratio = Total Contribution Margin / ( Sales price per unit * Number of units)*100

= $ 27,17, 520 / (26,130 units * $160) = $ 27,17, 520 / $ 41,80,800 *100 = 65%

Note:- In case of C Scenario:-

Contribution margin ratio = 35%

Contribution Margin ratio = Total Contribution Margin / ( Sales price per unit * Number of units)*100

Number of units given = 2453 units

Sales price per unit is assumed as 'x'

Total Contribution Margin = Number of units (sales price unit - variable cost) =

= 2453 units( x - $ 3536)

= 2453x - (2453*3536)

= 2453x - 8673808.   

(Sales price per unit * Number of units)*100 = x * 2453 = 2453x

Contribution Margin ratio = 0.35 = (2453x - 8673808) / (2453x)

= 0.35*2453x = 2453x - 86,73,808

= 858.55x - 2453x = -86,73,808

= -1594.45x = -86,73,808

Sales price per unit   = x = 86,73,808/1594.45 = $ 5440

Contribution margin per unit = Sales price per unit - Variable cost per unit

= $5440 - $3536 = $ 1,904.

Total Contribution Margin = Contribution margin per unit * Number of units

= $1904 * 2453 units = $ 46,70512.