Variable Costs and Contribution Margin analysis
Not sure if anyone can help me out with this, but I am trying to work out the variable costs and contribution margin per pot for a company that sells Terracotta pots. I only have the following information:
A manufacturing company sells Terracotta pots for $4-80 each.
The following costs have been determined by the company for the foreseeable future:
Plastic raw material $1.00 per kilo.
Electricity $1.40 per moulding machine hour.
Machine operator labour $14.00 per hour.
Rent on premises $1000.00 per month.
Manager's salary $2500.00 per month.
Transport and distribution $0.40 per pot.
The Terracotta pots require 1.5 kilos of raw meterial each.
The pots can be produced at 14 per moulding machine hour.
The questions are:
Calculate the variable costs per pot, and
What is the contribution margin per pot.
Thanks if anyone can help with this.