The contribution margin for the company is $10.
The difference between the selling price per unit and the variable cost per unit is known as the contribution margin (CM), also known as the dollar contribution per unit (DCPU). The amount of sales revenue known as "contribution" aids in covering fixed costs and is not utilized to cover variable expenditures. This approach is one of the cornerstones of break-even analysis. Analysis of contribution margins, a measure of operating leverage, evaluates the effectiveness with which increasing sales result in increasing profits. The fixed and variable costs of the company are combined in the contribution income statement, a management accounting version of the income statement, to determine contribution margin. Contribution margin calculations can be used by managers to determine whether to preserve or eliminate specific business features.
Contribution margin= 240000/24000=10
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Question:
Finley corporation has monthly fixed costs of $240,000. it sells two products for which it has provided the following information. Find the contribution margin of the company?
