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17 June, 03:26

A jeans maker is designing a new line of jeans called Slims. The jeans will sell for $345 per pair and cost $262.20 per pair in variable costs to make. (Round your answers to 2 decimal places.) (1) Compute the contribution margin per pair. (2) Compute the contribution margin ratio.

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  1. 17 June, 07:13
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    1. Contribution margin=$82.8

    2. Contribution margin ratio=$82.8/$345=0.24

    Explanation:

    1. The contribution margin per pair of jeans shall be determine through following mentioned formula:

    Contribution margin=Sale price of jeans per pair - variable costs of jeans per pair

    =$345-$262.20

    =$82.8

    2. The contribution margin ratio per pair of jeans shall be determine through following mentioned formula:

    Contribution margin ratio=Contribution margin/sale price of jeans per pair

    Contribution margin ratio=$82.8/$345=0.24
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