Southwest U's campus book store sells course packs for $16 each. The variable cost per pack...

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Question

Answer 1

Answer #1

Contribution Margin Per Unit = Selling Price Per Unit - Variable Cost Per Unit

= $ 16 - $ 10

= $ 6

Total Contribution Margin = Contribution Margin Per Unit * Units

= $ 6 * 60,000 packs

= $ 360,000

Total Contribution Margin - Fixed Cost = Profit

Fixed Cost = Total Contribution Margin - Profit

= $ 360,000 - $ 85,000

= $ 275,000

Hence the correct answer is d. $ 275,000

Answer 2

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