danambjones
Feb 21, 2007, 11:04 AM
Mark Corporation produces two models of calculators. The Business model sells for 60, and the Math model sells for 40. The variable expenses are given below:
Business Math
Model Model
Variable production costs per unit $15 $16
Variable selling and administrative expenses per unit $9 $6
The fixed expenses are 75,000 per month. The expected monthly sales of each model are: Business, 1,000 units; Math, 500 units.
The contribution margin ratio for the Business model is:
(a) 60 percent
(b) 85 percent
(c) 40 percent
(d) 75 percent
Can you show me the work to get the correct answer? Thanks!
Business Math
Model Model
Variable production costs per unit $15 $16
Variable selling and administrative expenses per unit $9 $6
The fixed expenses are 75,000 per month. The expected monthly sales of each model are: Business, 1,000 units; Math, 500 units.
The contribution margin ratio for the Business model is:
(a) 60 percent
(b) 85 percent
(c) 40 percent
(d) 75 percent
Can you show me the work to get the correct answer? Thanks!