For 2015, Athol’s Mowers had total sales of $34,343, with each product selling for $12 each....
For 2015, Athol’s Mowers had total sales of $34,343,
with each product selling for $12 each. Each product had variable
costs of $6.
Calculate the:
(a) Contribution margin
(b) Contribution margin ratio
(c) Unit contribution margin.
Round contribution margin ratio to the nearest percent.
Homework Answers
Selling Price of 1 unit = $12
Unit Variable Cost = $6
(C) Unit Contribution Margin = Unit Selling Price - Unit Variable Cost
= $12 - $6
= $6
(B) Contribution Margin Ratio = Contribution Margin per Unit/Selling Price per Unit
= $6/$12
= 50%
(A) Total Contribution Margin = Total Sales*Contribution Margin Ratio
= $34,343*50%
=$17,171.5
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