Estrada corporation produced 300,000 watches that it sold for $35 each. the company determined that fixed manufacturing cost per unit was $14 per watch. the company reported a $2,700,000 gross margin on its income statement.

determine the variable cost per unit, the total variable cost, the total contribution margin.

Variable cost per unit = $12

The total variable cost = $3,600,000

The total contribution margin = $6,900,000

Explanation:

Number of units produced = 300,000

Selling cost = $35

Revenue = 300,000 × $35

               = $10,500,000

Fixed cost = $14 per unit

Total fixed cost = 300,000 × $14

                          = $4,200,000

Gross margin = $2,700,000

Gross margin is the difference between the Revenue earned and the total cost.

Total cost = $10,500,000 - $2,700,000

                 = $7,800,000

Total cost = Total Fixed cost + Total variable cost

Total variable cost = $7,800,000 - $4,200,000

                               = $3,600,000

Variable cost per unit is the ratio of the total variable cost to the number of units produced.

Variable cost per unit = $3,600,000/300000

                                    = $12

Total contribution margin is the difference between the total revenue and the total variable cost.

Total contribution margin = Total revenue - Total variable cost

                                           = $10,500,000 - $3,600,000

                                           = $6,900,000

answer; ///i believe that the correct answer is ( inductive check first good

month 1 start amount =$3287.90 interest=(3287.90x0.0145/12)3.97 total to pay=$3291.81 paid =$1200 balance =$2,091.87

month 2 starting amount= $2,091.87 interest =$25.28 total to pay =$2117.15 paid =$1200 balance $917.15

month 3 starting amount =$917.15 interest =$11.08 total to pay =$928.23 paid =$928.23 balance =$0 total to pay 1200+1200+928.23 = $3328.23 it will take 3 months to pay a total of $3328.23