Question
In 2018, X Company expects to produce and sell 62,000 units of its only product for...
In 2018, X Company expects to produce and sell 62,000 units of
its only product for $34.14. The following are budgeted variable
costs per unit:
Direct materials $4.98
Direct labor 5.19
Variable overhead 4.78
Variable selling and administrative 5.31
Total 20.26
Budgeted fixed overhead for 2018 is $181,040, and budgeted
fixed selling and administrative expenses are $173,600.
What is X Company's budgeted contribution margin rate for
2018?
Homework Answers
Answer #1
Contribution margin the difference between price and variable costs.
Contribution margin = $ 34.14 - [ $ 4.98 + $ 5.19 + $ 4.78 + $ 5.31 ]
Contribution margin = $ 20.26
Contribution margin = [ $ 34.14 - $ 20.26 ]
Contribution margin = $ 13.88
X Company's budgeted contribution margin rate for 2018
= [ $ 34.14 - $ 20.26 ] 
Price
X Company's budgeted contribution margin rate for 2018 =
[ $ 34.14 - $ 20.26 ]
$ 34.14
X Company's budgeted contribution margin rate for 2018 = 40.66%
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