Question

The records of the Dodge Corporation show the following results for the most recent year:

Sales (16,000 units) $256,000
Variable expenses $160,000
Net operating income $32,000

Given the provided data, identify the contribution margin.

Answer 1

unitary contribution margin= $6

Step-by-step explanation:

Giving the following information:

Sales (16,000 units) $256,000

Variable expenses $160,000

First, we need to calculate the unitary selling price and unitary variable cost:

Selling price= 256,000 / 16,000= $16

Unitary variable cost= 160,000 / 16,000= $10

Now, the unitary contribution margin:

unitary contribution margin= selling price - unitary variable cost

unitary contribution margin= 16 - 10

unitary contribution margin= $6