Calculate the contribution margin

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Reference no: EM1350266

Rhetorix, Inc. produces stereo speakers.The selling price per pair of speakers is $900. The variable cost of production is $300 and the fixed cost per month is $60,000.

Required

a. Calculate the contribution margin associated with a pair of speakers.

b. In August, the company sold six more pairs of speakers than planned.What is the expected effect on profit of selling the additional speakers?

c. Calculate the contribution margin ratio for Rhetorix associated with a pair of speakers. (Round to 2 decimal places.)

d. In October, the company had sales that were $7,000 higher than planned.What is the expected effect on profit related to the additional sales? (Round to the nearest dollar.)

Reference no: EM1350266

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