A furniture manufacturer specializes in wood tables. The tables sell for $80 per

Question

A furniture manufacturer specializes in wood tables. The tables sell for $80 per unt and incur $45 per unit in variable costs. The company has $2,300 in fixed costs per month Road the tequirement 6. Prepare a contnibution margin income statement for one month t the company sells 610 tables Requirements 6 Prepare a contribution margin income statement for one month i the company sells 610 tables 7. What is the total contribution margin for the month when the company sels 610 tables? 8. What is the unit contrbution margin? 9. What is the contribution margin retio? 7. What is the total contribution margin for the month when the company sells 610 taties? The contribution margin is $ 8. what the unit cowbution margin? Select the formula labels and then entering Print Done the amounts to compute the contribution margin per unit 9. What is the contribution margin ratio? Select the formula labels and then enter the amounts to compute the contrtuition margin ratio Contribution mergin ratio Choose from any list or enter any number in the input fields and then continue to the next question

Explanation / Answer

6. Contribution margin Income statement

7. Toatl contribution margin for the month when the company sells 610 units = (selling price per unit - variable cost per unit) * sales in units = (80 - 45) * 610 = 21,350

8. Unit contribution margin =

Selling price per unit - variable cost per unit

= 80 - 45 = 35

9. Contribution margin ratio =

Contribution margin per unit / selling price per unit

= 35 / 80 = 43.75%.

Sales revenue(610*80) 48,800 Variable costs(610*45) 27,450 Contribution margin 21,350 Fixed costs (2,300) Operating income 19,050

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