Company sells a product for per unit. Variable costs are per unit, and fixed costs are per month. The company expects to sell units in . Calculate the contribution margin per unit, in total, and as a ratio.

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Company sells a product for $15 per unit. Variable costs are $8 per unit, and fixed costs are $350,000 per month. The company expects to sell units 75,000. Calculate the contribution margin per unit, in total, and as a ratio.

contribution margin per unit = sales price - variable cost = $15 - $8 = $7

total contribution margin = contribution margin per unit x total sales = $7 x 75,000 = $525,000

contribution margin ratio = total contribution margin / total sales = $525,000 / ($15 x 75,000) = $525,000 / $1,125,000 = 0.4666 = 46.67%

explanation:

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