Question

Viva sells its waterproof phone case for $90 per unit. Fixed costs total $118,800, and variable costs are $36 per unit Determine the contribution margin per unit. por unit por unit per unit Contribution margin Determine the break-even point in units

Answer 1

GivenGiven, Viva sells its waterproof phone case for $90 per unit. Fixed costs total $118,800, and variable costs are $36 per unitWe know that the formula to find contribution margin is as follows:Contribution margin = Sales - Variable expensesTo calculate contribution margin per unit, we need to know the contribution margin per unit of sales. It is calculated by subtracting the variable cost per unit from the selling price per unit.So, Contribution margin per unit = Selling price per unit - Variable cost per unit = $90 - $36 = $54Formula to calculate Break-even point in units is as follows:Break-even point (units) = Fixed cost / Contribution margin per unitTherefore, Break-even point in units = $118,800 / $54 = 2,200 unitsThus, the contribution margin per unit is $54 and the break-even point in units is 2,200 units.