Question

Brand "DEF"Brand "XYZ"FY2019 Income StatementFY2019 Income Statement Revenue: $1,210,000.00$1,100,000.00No. of units sold/yr.: 2,500 4,000Variable costs: $800,000.00 $400,000.00 Contribution: $410,000.00 $700,000.00a) Calculate the contribution margin for each of the 2 brands. Outline your reasoning. (4 points)

Answer 1

Instructions are listed below.

Step-by-step explanation:

Giving the following information:

Brand "DEF"

Revenue= 1,210,000

Variable costs= 800,000

Contribution= 410,000

Brand "XYZ"

Revenue= 1,100,000.00

Variable costs= 400,000.00

Contribution= 700,000.00

The information already provides with the contribution margin per brand. I will calculate the contribution margin per unit, assuming that is what it is asked for:

Contribution margin per unit= total contribution margin/ number of units

Brand "DEF":

CMu= 410,000/2,500= $164 per unit

Brand "XYZ":

CMu= 400,000/4,000= $100 per unit