Reference no: EM133659685

Question: Koala Pty Ltd makes premium fishing rods and sells them to fishing retailers around Australia. Their products are in such high demand that Koala Pty Ltd sells everything they make (that is, they have no finished goods inventory at the end of each period). Koala Pty Ltd accountant has advised them that while business is good, the company really needs to understand its cost behaviour better, especially the relationship between fixed and variable cost. Koala Pty Ltd also needs to have a better understanding of how well its contribution margin is contributing towards paying off its fixed costs. Each fishing rod is sold to retailers for a price of $100. The following data relates to production (numbers of fishing rods produced) and total costs for each month in 2023: Month in 2023 Rods produced Total Cost Jan 186 17,790 Feb 186 17,790 Mar 195 17,925 Apr 183 17,755 May 174 17,610 Jun 171 17,665 Jul 165 17,475 Aug 180 17,800 Sep 186 17,790 Oct 195 17,925 Nov 210 18,150 Dec 195 17,925 Total 2,220 $213,300 You are required to advise the management of Koala Pty Ltd of the following. 2. What is Koala Pty Ltd Contribution Margin per unit produced?