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2 October, 04:51

Contribution Margin Molly Company sells 37,000 units at $19 per unit. Variable costs are $11.59 per unit, and fixed costs are $109,700. Determine (a) the contribution margin ratio, (b) the unit contribution margin, and (c) income from operations. a. Contribution margin ratio (Enter as a whole number.) % b. Unit contribution margin (Round to the nearest cent.) $ per unit c. Income from operations $

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  1. 2 October, 06:37
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    (a) Contribution margin ratio = 0.39, or 39%

    (b) the unit contribution margin = $7.4 per unit

    (c) income from operations = $164,470

    Explanation:

    Total revenue = 37,000 * $19 = $703,000

    Total variable cost = 37,000 * $11.59 = $428,830

    Margin = $703,000 - $428,830 = $274,170

    (a) the contribution margin ratio

    Contribution margin ratio = $274,170/$703,000 = 0.39, or 39%

    (b) the unit contribution margin

    Unit contribution margin = $19 - $11.59 = $7.4 per unit

    (c) income from operations

    Income from operations = $274,170 - $109,700 = $164,470
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