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13 July, 01:56

Zeke Company sells 26,900 units at $16 per unit. Variable costs are $9 per unit, and fixed costs are $38,100. The contribution margin ratio and the unit contribution margin, respectively, are

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  1. 13 July, 02:59
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    Contribution margin ratio = 0.4375

    Contribution margin = $7

    Explanation:

    Giving the following information:

    Zeke Company sells 26,900 units at $16 per unit. Variable costs are $9 per unit, and fixed costs are $38,100.

    To calculate the contribution margin per unit, we need to use the following formula:

    Contribution margin = selling price - unitary variable cost

    Contribution margin = 16 - 9 = $7

    Now, we can calculate the contribution margin ratio:

    Contribution margin ratio = contribution margin / selling price

    Contribution margin ratio = 7/16

    Contribution margin ratio = 0.4375
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