Eubank Corporation produced 140,000 watches that it sold for $27 each during 2008. The company determined that

Question:

Eubank Corporation produced 140,000 watches that it sold for $27 each during 2008. The company determined that fixed manufacturing cost per unit was $6 per watch. The company reported a $420,000 gross margin on its 2008 financial statements.

Required

Determine the total variable cost, the variable cost per unit, and the total contribution margin.

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...