Question

Brief Exercise 22-06 Determine the missing amounts. Unit Selling Price Unit Variable Costs Unit Contribution Margin Contribution Margin Ratio 1. $500 $300 s % (b) 2. $500 $120 % (d) 3. $875 35 %

Answer 1

Ans:

Particulars	1	2	3
Unit selling price	$500	$500	$2,500*
Less: unit variable costs	($300)	($380)	($1,625)
Unit contribution margin	$200	$120	$875
Contribution margin ratio	40%	24%	35%

Contribution margin ratio = (Unit Contribution margin/Unit Selling price)*100.

Variable cost = Units selling price - Unit contribution margin.

Unit contribution margin = Unit selling price - Unit variable cost.

Unit Selling price = Unit variable cost + Unit contribution margin

Note:

case 3 sales calculation:

Sales = ($875*100)/35

Unit selling price = $2,500

Thank you,

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