Anniston Gifts makes a product that sell for $40 per unit has and has a unit variable cost of $18. The contribution margin ratio is 55%. Annual fixed costs are $11,990. The company expects to sell 2,000 units this year. How much would profits increase by, if 140 more units are sold than expected?

Question

Quizplus · Accepted Answer

The contribution margin per unit is $40 - $18 = $22. Selling 140 more units increases profit by 140 * $22 = $3,080.

Anniston Gifts Makes a Product That Sell for $40 Per