Pam's Puppy Parlor is a pet grooming parlor and boutique.Pam sells personalized puppy blankets at $20 each.Her contribution margin is $5.If Pam has an additional $80 in blanket sales, how much additional contribution margin will this produce?

Question

Quizplus · Accepted Answer

The contribution margin per blanket is $5. Therefore, for an additional $80 in sales, dividing $80 by the sale price per blanket ($20) gives 4 blankets. Multiplying the number of blankets (4) by the contribution margin per blanket ($5) gives an additional contribution margin of $20.

Pam's Puppy Parlor Is a Pet Grooming Parlor and Boutique