Compute the missing? information, starting with scenario? A, then for scenarios

Question

Compute the missing? information, starting with scenario? A, then for scenarios B and C.

A

B

C

Number of units

2,900

units

9,790

units

2,370

units

Sale price per unit

$360

$500

$5,110

Variable costs per unit

270

250

2,555

Calculate:

Contribution margin per unit

Total contribution margin

Contribution margin ratio

A

B

C

Number of units

2,900

units

9,790

units

2,370

units

Sale price per unit

$360

$500

$5,110

Variable costs per unit

270

250

2,555

Calculate:

Contribution margin per unit

Total contribution margin

Contribution margin ratio

Explanation / Answer

Contribution margin per unit = Sale price per unit - Variable cost per unit

Total contribution margin = Contribution margin per unit * Number of units

Contribution margin ratio = Contribution margin per unit / Selling price per unit

A B C Number of units 2,900 units 9,790 units 2,370 units Sale price per unit 360 500 5,110 Variable cost per unit 270 250 2,555 Calculate : Contribution margin per unit 90 (360-270) 250 (500-250) 2,555 (5,110-2,555) Total contribution margin 261,000 (90*2,900) 2,447,500 (250*9,790) 6,055,350 (2,555*2,370) Contribution margin ratio 25% (90/360) 50% (250/500) 50% (2,555/5,110)

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