Question

Madison Corporation sells three products (M, N, and O) in the following sales mix: 3:1:2. Unit price and cost data are: M N O Unit sales price $ 7 $ 4 $ 6 Unit variable costs 3 2 3 Total fixed costs are $340,000. The contribution margin per composite unit for the current sales mix (round to the nearest cent) is:

Answer 1

M = $4

N = $2

O = $3

Step-by-step explanation:

Contribution margin = Sales - Variable Costs

Therefore,

M N O

Sales $ 7 $ 4 $ 6

Less Variable costs ($ 3) ($ 2) ($ 3)

Contribution $4 $2 $3