Question

A company that makes organic fertilizer has supplied the following data:

Bags produced and sold 200,000
Sales revenue $1,560,000
Variable manufacturing expense $660,000
Fixed manufacturing expense $448,000
Variable selling and administrative expense $180,000
Fixed selling and administrative expense $214,000
Net operating income $58,000

The company's unit contribution margin is closest to:______

a. 15,128 units
b. 16,1 units
c. 168,986 units
d. 100,444 units

Answer 1

Answer: $3.60

Step-by-step explanation:

Contribution Margin is calculated by deducting variable expenses from the sales.

= Sales - Variable manufacturing expense - Variable selling and administrative expense

= 1,560,000 - 660,000 - 180,000

= $720,000

Unit Contribution Margin = 720,000/200,000 bags sold

= $3.60

The options are not for the Unit Contribution Margin.