Question

Question: Computing contribution margin in total, per unit, and as a ratio

Complete the table below for contribution margin per unit, total contribution margin, and contribution margin ratio:

A B C Number of units 1,720 units 14,920 units 4,620 units

Sales price per unit \( 1,800 \) 4,500 $ 5,550

Variable costs per unit 720 3,600 1,665

Calculate:                  

Contribution margin per unit                      

Total contribution margin                        

Contribution margin ratio

Short answer

Answer

1. $\mathbf{A}\mathbf{=}\mathbf{1}\mathbf{,}\mathbf{080}\mathbf{,}\mathbf{B}\mathbf{=}\mathbf{\$}\mathbf{900}\mathbf{,}\mathbf{C}\mathbf{=}\mathbf{\$}\mathbf{3}\mathbf{,}\mathbf{885}$
2. $\mathbf{A}\mathbf{=}\mathbf{\$}\mathbf{1}\mathbf{,}\mathbf{857}\mathbf{,}\mathbf{600}\mathbf{,}\mathbf{B}\mathbf{=}\mathbf{\$}\mathbf{13}\mathbf{,}\mathbf{428}\mathbf{,}\mathbf{000}\mathbf{,}\mathbf{C}\mathbf{=}\mathbf{\$}\mathbf{17}\mathbf{,}\mathbf{948}\mathbf{,}\mathbf{700}$
3. $\mathbf{A}\mathbf{=}\mathbf{60}\mathbf{\%}\mathbf{,}\mathbf{B}\mathbf{=}\mathbf{12}\mathbf{\%}\mathbf{,}\mathbf{C}\mathbf{=}\mathbf{70}\mathbf{\%}$

Step-by-step solution

Calculation of contribution margin per unit

Sales per unit	$1800	$4500	$5,550
Less: Variable cost	$720	$3600	$1,665
Contribution	$180	$900	$3,885

Calculation of total contribution margin 

Number of units	1,720	14,920	4,620
Contribution	$1,080	$900	$3,885
Total contribution	$1,857,600	$13,428,000	$17,948,700

Calculation of contribution margin ratio

Sales per unit	$1,800	$4800	$5,550
Contribution	$1,080	$900	$3,885
Contribution margin ratio	60%	12%	70%