Question

The following data are for Trendy Fashion Apparel:

	North	South
Sales volume (units):
??? Blouses	5,138	4,227
??? Skirts	3,356	7,611
Sales price per unit:
??? Blouses	$21	$18
??? Skirts	$18	$20
Variable cost per unit
??? Blouses	$7	$7
??? Skirts	$13	$13

a. Determine the contribution margin for Skirts.
$

b. Determine the contribution margin for the South Region.
$

Answer 1

a. The contribution margin for Skirts = (Selling Price Per Unit - Variable Cost Per Unit ) * Sales Volume of Skirts

= ( $ 18 - $ 13) * 3,356 + [ ( $ 20 - $ 13) * 7611]

= $ 16,780+ $ 53,277

= $ 70,057

Hence the correct answer is $ 70,057

b. the contribution margin for the South Region =  (Selling Price Per Unit - Variable Cost Per Unit ) * Sales Volume

Blouses = ( $ 18 - $ 7 ) * 4227

= $ 46,497

Skirts = ( $ 20 -$ 13) * 7611

= 53,277

Hence Total =$ 46,497 + $ 53,277

= $ 99,774

Hence the correct answer is  $ 99,774