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20 August, 09:38

Chilton, Inc. sold 11,900 units last year for $20 each. Variable costs per unit were $3.00 for direct materials, $2.60 for direct labor, and $2.60 for variable overhead. Fixed costs were $61,200 in manufacturing overhead and $41,800 in nonmanufacturing costs. a. What is the total contribution margin? (Round your intermediate calculations to 2 decimal places.) b. What is the unit contribution margin? (Round your answer to 2 decimal places.) c. What is the contribution margin ratio? (Round your intermediate calculations and final answer to 2 decimal places.)

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  1. 20 August, 10:50
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    a. Total contribution margin is $140,420.00

    b. Unit contribution margin is $11.80

    c. Contribution margin ratio is 0.59.

    Explanation:

    a. What is the total contribution margin? (Round your intermediate calculations to 2 decimal places.)

    Sales revenue = 11,900 * $20 = $238,000

    Total variable cost = (11,900 * $3) + (11,900 * $2.6) + (11,900 * $2.6) = $97,580

    Total contribution margin = $238,000 - $97,580 = $140,420.00

    b. What is the unit contribution margin?

    Unit contribution margin = Total contribution margin : Units sold = $140,420.00 : 11,900 = $11.80

    c. What is the contribution margin ratio? (Round your intermediate calculations and final answer to 2 decimal places.)

    Contribution margin ratio = Unit contribution margin : Unit selling price = $11.80/20.00 = 0.59.
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