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Margo has determined the contribution margin ratio of a product to be 40%. Its selling price is $50, while its costs consist of two variable costs and one fixed cost. The sole fixed cost is a selling and administrative cost. The variable selling and administrative cost is $2.50/unit. What is the variable manufacturing cost per unit? What is the gross margin of one unit of this product if there are no fixed manufacturing costs? What is the gross margin percentage for this product?

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NakiSans

Answer:

manufacturing cost per unit: $27.50

no fixed manufacturing cost: $20

gross margin: 40%

Step-by-step explanation:

selling price is 50$

total varible cost is 60% then, which is 30$

2.50 per unit

30-2.50= 27.50

selling price minus total variable cost

50-30=20

gross margin= gross margin/selling price x 100

20/50x100=40

40%

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