Davis, Managerial Accounting, 3e Help I System Anneuncements 2 The New Age Pet S

Question

Davis, Managerial Accounting, 3e Help I System Anneuncements 2 The New Age Pet Store sells Diva Doggle pet waste disposal systems for $50 each. The systems Include the unit and a one-year supply of enzyme digester waste terminator. The cost of the unit and enzyme is $35. The only other costs are fixed costs of $3,000. During the current period, New Age sold 600 of the units through the store's new on-line catalog division. Your answer is correct What is the contribution margin per unit? (Round answer to 2 declmal places, e.g. 1.64) Contribution margin $ Click If you would llke to Show Work for this question: Open Show Work What is the contribution margin ratio? Contribution margin ratio

Explanation / Answer

Answer

A.

The contribution margin per unit: = selling price per unit - variable costs per unit.

$50-$35 =$15

B.

The contribution margin ratio = contribution margin / selling price

=$15/$50*100 = 30%

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