What is abc inc contribution margin

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Reference no: EM132528657

Selling price per unit (package of 2 CDs)...................................... $26.00

Variable costs per unit:

Direct material...............................................................................................................$6.50

Direct labor......................................................................................................................$5.00

Artist's royalties..............................................................................................................$5.00

Manufacturing overhead..........................................................................................$3.50

Selling expenses............................................................................................................$1.00

Total variable costs per unit............................................................$21.00

Annual fixed costs:

Manufacturing overhead..........................................................................................$188,000

Selling and administrative.......................................................................................$270,000

Total fixed costs................................................................................$458,000

Forecasted annual sales volume (120,000 units).........................$3,120,000

Question 1: What is ABC Inc.'s contribution margin (CM)?

Reference no: EM132528657

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