Selling Price and Required Contribution Margins
Please help with the following problem involving selling price and required contribution margins.
Anna & Anna Corporation is a small table manufacturing company operating in the north of Puerto Rico. Managers estimate the following costs per unit (one table)
Direct material (DM) $45.00
Direct labor (DL) $20.00
Variable manufacturing overhead(VMO) $24.00
Variable administrative expenses (VAE) $25.00
Monthly fixed costs are
The estimated contribution margin is 40%
Find the selling price per unit to achieve the required contribution margin of 35%.© SolutionLibrary Inc. solutionlibary.com 9836dcf9d7 https://solutionlibrary.com/business/finance/selling-price-and-required-contribution-margins-7e4r
...elling price per unit to achieve the required contribution margin of 35%.
The contribution margin percentage = (Selling Price - Variable Cost)/Selling Price