Last year, X Company sold 56,000 units. The following revenue and cost informati

Question

Last year, X Company sold 56,000 units. The following revenue and cost information for the year is available:

8. What was X Company's contribution margin per unit? $13.25 (already figured this part out)

b. What was X Company's contribution margin rate?

Total    Per-Unit Revenue $1,828,960 $32.66    Direct materials 238,000 4.25    Direct labor [all variable] 282,240 5.04    Variable overhead 303,520 5.42    Fixed overhead 167,000 2.98    Variable selling and administration 263,200 4.70    Fixed selling and administration 163,000 2.91   

Explanation / Answer

Hi,

Please find the answe as follows

Contribution Margin = 32.66 - 4.25 - 5.04 - 5.42 - 4.70 = $13.25 per unit

Contribution Margin Rate = Contribution Per Unit/Sales Per Unit*100 = 13.25/32.66*100 = 40.569% or 40.57%

Thanks.

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