Quality Stores,Inc. ,sells several products.Information of average revenue and costs is as follows:
$\begin{array}{ll}
\text { Selling price per unit } & \$ 20 \
\text { Variable costs per unit: } & \
\text { Direct material } & \$ 4 \
\text { Direct manufacturing labor } & \$ 1.80 \
\text { Manufacturing overhead } & \$ 0.4 \
\text { Selling costs } & \$ 3 \
\text { Annual fixed costs } & \$ 96,000
\end{array}$
What is the contribution margin percentage? (Round your answer to the nearest whole percent. )

Question

Quizplus · Accepted Answer

The contribution margin per unit is calculated as the selling price per unit minus the variable costs per unit. Variable costs per unit are $4 (Direct material) + $1.80 (Direct manufacturing labor) + $0.4 (Manufacturing overhead) + $3 (Selling costs) = $9.20. Contribution margin per unit = $20 - $9.20 = $10.80. Contribution margin percentage = ($10.80 / $20) * 100 = 54%.

Quality Stores,Inc What Is the Contribution Margin Percentage? (Round Your Answer to Is