Question

Juniper enterprises sells handmade clocks. its variable cost per clock is $6, and each clock sells for $24. calculate juniper's contribution margin per unit and contribution margin ratio.

Answer 1

To find contribution margin per unit, we subtract variable cost from sales price. This means that contribution margin is 24 - 6 = $18. To find contribution margin ratio, we divide the contribution margin by the sales price and multiply by 100%. 18/24 x 100% = 75%