Question
Exercise 5-7 (Algo) Contribution margin LO A1 A jeans maker is designing a new line of jeans called Slams. Slams will sell for $370
Exercise 5-7 (Algo) Contribution margin LO A1 A jeans maker is designing a new line of jeans called Slams. Slams will sell for $370 per unit and cost $262.70 per unit in variable costs to make. Fixed costs total $64,500. (Round your answers to 2 decimal places.) Answer is complete but not entirely correct. 1. Compute the contribution margin per unit. Sales Less Variable cost Contribution margin 2. Compute the contribution margin ratio. Numerator: Contribution margin per unit ( 51.00x 15 2.183.00 per unit 1,549,930.00 per unit 633.070.00 per unit Denominator: Selling price per unit $ 20.00 3. Compute income if 5,900 units are produced and sold Income Contribution Margin Ratio Contribution margin ratio 175.80% $568.570
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