Business, 05.05.2020 16:21 HelloPeps

Perfect Stampers makes and sells aftermarket hub caps. The variable cost for each hub cap is $4.75, and the hub cap sells for $9.95. Perfect Stampers has fixed costs per month of $3,120. Compute the contribution margin per unit and the break-even sales in units and in dollars for the month. Round the contribution margin per unit to two decimal places.

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Answer from: samanthabutryn

Contribution margin per unit = 52,26%

break-even sales in units = 600

break-even sales in units = $5,970.15

Explanation:

Contribution margin per unit = Contribution / Selling Price × 100

= ( $9.95 - $4.75 ) / $9.95 × 100

= 52,26%

break-even sales in units = Fixed Costs / Contribution per unit

= $3,120 / ( $9.95 - $4.75 )

= $3,120 / $5.20

= 600

break-even sales in units = Fixed Costs / Contribution margin

= $3,120 / 52,26%

= $5,970.15

Answer from: bakerj4314

Contribution margin per unit = $5.20

Break-even sales in units = 600 units

Break-even sales in dollars = $5,970

Explanation:

Contribution margin per unit = Selling price - variable cost = $9.95 - $4.75 = $5.20

Break-even sales in units = Fixed cost ÷ Contribution margin per unit = $3,120 ÷ $5.20 = 600 units

Contribution margin ratio = Contribution margin per unit ÷ Selling price = $5.20 ÷ $9.95 = 0.522613065326633

Break-even sales in dollars = Fixed cost ÷ Contribution margin ratio = $3,120 ÷ 0.522613065326633 = $5,970

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Perfect Stampers makes and sells aftermarket hub caps. The variable cost for each hub cap is $4.75,...

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