Chapter 20: Q4SE (page 1121)
Calculating contribution margin
Glenn Company sells a product for \(80 per unit. Variable costs are \)60 per unit, and fixed costs are $800 per month. The company expects to sell 560 units in September. Calculate the contribution margin per unit, in total, and as a ratio.
Short Answer
- Contribution margin per unit=$20
- Contribution margin in total = $11,200
- Contribution margin ratio = 25%