Question

In the last reporting period, Helena's Heavenly Fixture Company recorded 100,000 units sold for the first time in the history of the company. The price per unit was $89.99 and variable costs per unit at $36.39. Showing all work in the space provided, compute the contribution margin. Next, compute the fixed costs if the operating income is $4,020,000.

Answer 1

Answer and Explanation:

The computation is shown below:

For the contribution margin

= Number of units sold × (Selling price - variable cost)

= 100,000 units × ($89.99 - $36.69)

= $5,360,000

Now the fixed cost is

= Contribution margin - operating income

= $5,360,000 - $4,020,000

= $1,340,000

hence, the same is to be relevant