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Estimate of the company variable operating expenses per unit

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Reference no: EM131865846

Question - The following data have been provided by a retailer that sells a single product:

This Year Last Year

Units Sold 200,000 150,000

Sales Revenue $1,000,000 $750,000

Less: Cost of Goods Sold $ 700,000 $525,000

Gross Margin $ 300,000 $225,000

Less: Operating Expenses $ 222,000 $210,000

Operating Income $ 78,000 $ 15,000

1. What is the best estimate of the company's variable operating expenses per unit?

A) $0.24 per unit. B) $0.71 per unit. C) $0.90 per unit. D) $4.17 per unit.

2. What is the best estimate of the company's total fixed operating expenses per year?

A) $ 0. B) $ 44,000. C) $ 80,000. D) $174,000.

3. What is the best estimate of the company's contribution margin for this year?

A) $252,000. B) $300,000. C) $158,000. D) $120,000.

Reference no: EM131865846

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