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Assignment takeAssignmentMain.doinvoker: assignments&takeAssignmentSessionLocator;: assignment-take ? W2] Online te.. ? E Preview | E, clip EB Auto Clip | Print Clip List Search-,-EN share | More>> . TripAdvisor Contribution Margin Lanning Company sells 160,000 units at $45 per unit. Variable costs are $27 per unit, and fixed costs are $975 Determine (a) the contribution margin ratio, (b) the unit contribution margin, and (e) income from operations. a. Contribution margin ratio (Round to one decimal place.) b. Unit contribution margin c. Income from operations per unit heck My Work

Explanation / Answer

a. Contribution margin ratio = (Selling price - Variable cost) / Selling price = ($45 - $27) / $45 = 40.0%

b. Unit contribution margin = Selling price - Variable cost = $45 - $27 = $18 per unit

c. Income from operations = Sales - Variable costs - Fixed costs = ($45 × 160,000) - ($27 × 160,000) - $975,000 = $1,905,000

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