Determine what is the company contribution margin ratio

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Reference no: EM132528663

Selling price per unit (package of 2 CDs)......................................$24.00

Variable costs per unit:

Direct material...............................................................................................................$5.50

Direct labor......................................................................................................................$4.50

Artist's royalties..............................................................................................................$4.00

Manufacturing overhead..........................................................................................$3.00

Selling expenses............................................................................................................$1.10

Total variable costs per unit............................................................$18.10

Annual fixed costs:

Manufacturing overhead..........................................................................................$186,000

Selling and administrative.......................................................................................$260,000

Total fixed costs................................................................................$446,000

Forecasted annual sales volume (120,000 units).........................$2,880,000

Question 1: What is the company's contribution margin ratio (CM ratio)?

Reference no: EM132528663

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