Exercise 22-9 Contribution margin L.O.A2 A pants maker is designing a new line o

Question

Exercise 22-9 Contribution margin L.O.A2
A pants maker is designing a new line of pants called the Redbird. The pants will sell for $335 per pair and cost $261.30 per pair in variable costs to make.

(1)
Compute the contribution margin per pair. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Contribution margin?

(2) Compute the contribution margin ratio. (Round your intermediate calculation to 2 decimal places. Omit the "%" sign in your response.)

Contribution margin ratio?

Explanation / Answer

The Sales Revenue is $ 335 and the VC per pair is $ 261.30. Thus, the contribution per pair is (335-261.30) = $ 73.70 Therefore, Contribution margin = 73.70/335 = 0.22 or say 22 %.

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.