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18 January, 01:22

Riker Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $149 per unit. Sales volume (units) 14,800 16,310 Cost of sales $1,272,800 $1,402,660 Selling and administrative costs $671,000 $698,180 Question: What will estimated contribution margin be if 15,800 units are sold?

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  1. 18 January, 02:03
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    Riker Corporation's Contribution Margin at 15,800 level of activity is $995,400 ($63 per unit) and Contribution Margin (%) is 42%

    Explanation:

    Contribution at Sales Volume of 15,800:

    Sales Revenue (15,800 * $149) $2,354,200

    Cost of Sales (Working 1) $ (1,358,800)

    Contribution Margin $995,400

    Contribution Margin (per unit) $63

    Contribution Margin (%) 42%

    Working 1

    Sales Volume (Units) 14,800 16,310

    Cost of Sales ($) $1,272,800 $1,402,660

    Cost of Sales per unit $86 $86

    (Cost of Sales : Sales Volume)

    *Figures in brackets represent negative figures
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