Answer the following questions using the information below:
Holly's Ham, Inc. sells hams during the major holiday seasons. During the current year 11,000 hams were sold resulting in $220,000 of sales revenue, $55,000 of variable costs, and $24,000 of fixed costs.
-Contribution margin per ham is:
A)$5.00
B)$15.00
C)$20.00
D)None of these answers are correct.

Question

Quizplus · Accepted Answer

Contribution margin per ham = Sales revenue per ham - Variable cost per ham.
Sales revenue per ham = $220,000/11,000 = $20
Variable cost per ham = $55,000/11,000 = $5
Contribution margin per ham = $20 - $5 = $15. Therefore, the correct choice is B.

Answer the Following Questions Using the Information Below