Dakota Company provides the following information about it’s single product Targ

Question

Dakota Company provides the following information about it’s single product Targeted operating income $40,000 Selling price per unit $350 Variable cost per uniit $105 Total fixed costs $50,000 What is the contribution margin rate? Dakota Company provides the following information about it’s single product Targeted operating income $40,000 Selling price per unit $350 Variable cost per uniit $105 Total fixed costs $50,000 What is the contribution margin rate? Targeted operating income $40,000 Selling price per unit $350 Variable cost per uniit $105 Total fixed costs $50,000 What is the contribution margin rate?

Explanation / Answer

Selling price = 350

Variable cost per unit = 105

Contribution margin per unit = (350-105) = 245

Contribution margin rate = 245*100/350 = 70%

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