Question

Mittri Inc., produces and sells milk chocolate and white chocolate bars. Revenue and cost information relating to the products are: Products Milk Chocolate White Chocolate Selling Price per bar $0.75 $2.00 Variable Expense per bar $0.45 $1.05 Traceable Fixed Expenses per year $11,600 $145,000 Common fixed expenses in the company total $162,000 annually. Last year the company produced and sold 492,600 milk chocolate bars and 250,300 white chocolate bars.What is the total revenue (sales) for year and contribution margin for white chocolate?

Answer 1

I have formulated the above details to a table for easy understanding:-

Requirement 1:- What is the total revenue (sales) for year?

Total revenue for year (White chocolate) = (Seliing price per White chocolate bar x Units sold) = ( ($2.00 x 250,300 units) = $500,600

Requirement 2:- contribution margin for white chocolate?

Contribution margin (white chocolate) = (Sales price per unit - Variabl cost per unit) x Units sold = ($2.00 - $1.05) x 250,300 units = $237,785