About the area. Almost 240 families have their homes in this small village in Cincinnati Metro area. The community deals with a very bad economic situation, the lack of employment keeps more than 40% of the residents and their families below the poverty line which preoccupies the local and the county governments.
1. Calculate the contribution margin of one unit of each product by deducting the variable cost of one unit from its selling price. For example, if a unit of product A sells for $10 and it has variable costs of $4, its contribution margin per unit is $6. 2. Calculate the percentage of total sales mix that each product accounts for.
Variable cost ratio = total variable cost / sales. As long as price and variable cost remain the same, these ratios will remain the same. It does not matter if the company sells 10 units or 1 million units, the percentage of each sale that becomes contribution margin or does to cover variable costs is the same.angout Limited, LLC sells one product priced at $40 per unit. The variable costs (direct materials, direct labor, variable overhead and variable selling) is $25 per unit. Calculate the contribution margin per unit, the contribution margin ratio and the variable cost ratio.