Question

A cement manufacturer has supplied the following data: tons of cement produced and sold 250,000 sales revenue $ 1,100,000 variable manufacturing expense $ 430,000 fixed manufacturing expense $ 289,000 variable selling and administrative expense $ 70,000 fixed selling and administrative expense $ 235,000 net operating income $ 76,000 what is the company's unit contribution margin?

Answer 1

The company's unit contribution margin is $2.40.

Step-by-step explanation:

The unit contribution margin can be calculated by subtracting the variable expenses per unit from the selling price per unit.

1. First, calculate the total fixed expenses by adding the fixed manufacturing expense and the fixed selling and administrative expense: $289,000 + $235,000 = $524,000
2. Next, calculate the contribution margin per unit by subtracting the total variable expenses per unit from the selling price per unit: $1,100,000 - $430,000 - $70,000 = $600,000
3. Finally, divide the contribution margin per unit by the number of units produced and sold to get the unit contribution margin: $600,000 / 250,000 = $2.40