A company sells small motors as a component part to automobiles. The Model 101 motor sells for $800 and has per-unit variable costs of $320 associated with its production. The company has fixed expenses of $100,000 per month. In August, the company sold 415 of the Model 101 motors. A. Calculate the contribution margin per unit for the Model 101. Contribution margin $ 480 v per unit B. Calculate the contribution margin ratio of the Model 101. Contribution margin ratio 60 v % Feedback Check My Work A. Remember that the contribution margin is the amount remaining after covering variable costs. This is the amount that is used to contribute to covering fixed costs. B. The ratio is the proportion/percentage of the sales price that covers fixed costs. C. Prepare a contribution margin income statement for the month of August. Use a minus sign for a net loss if present.

A company sells small motors as a component part to automobiles. The Model 101 motor sells for $800 and has per-unit variable costs of $320 associated with its production. The company has fixed expenses of $100,000 per month. In August, the company sold 415 of the Model 101 motors. A. Calculate the contribution margin per unit for the Model 101. Contribution margin $ 480 v per unit B. Calculate the contribution margin ratio of the Model 101. Contribution margin ratio 60 v % Feedback Check My Work A. Remember that the contribution margin is the amount remaining after covering variable costs. This is the amount that is used to contribute to covering fixed costs. B. The ratio is the proportion/percentage of the sales price that covers fixed costs. C. Prepare a contribution margin income statement for the month of August. Use a minus sign for a net loss if present.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 1PA: A company sells small motors as a component part to automobiles. The Model 101 motor sells for $850...

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