Question

# Contribution Margin Harry Company sells 21,000 units at \$30 per unit. Variable costs are \$25.50 per...

Contribution Margin Harry Company sells 21,000 units at \$30 per unit. Variable costs are \$25.50 per unit, and fixed costs are \$31,200. Determine (a) the contribution margin ratio, (b) the unit contribution margin, and (c) operating income. a. Contribution margin ratio (Enter as a whole number.) % b. Unit contribution margin (Round to the nearest cent.) \$ per unit c. Operating income \$

Number of units sold = 21,000

Selling price per unit = \$30

Variable cost per unit = \$25.50

Fixed cost = \$31,200

b.

Contribution margin per unit = Selling price per unit - Variable cost per unit

= 30 - 25.5

= \$4.5

a.

Contribution margin ratio = Contribution margin per unit /Selling price per unit

= 4.5/30

= 15%

c

Contribution format income statment

 Sales (21,000 x 30) 630,000 variable cost(21,000 x 25.50) -535,500 Contributin margin 94,500 Fixed cost -31,200 Operating incom \$63,000

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