Question 161307: Nielsen’s fine clothing store spends 30 percent of its $380,000 wholesale clothing purchases on shirts. The company sells 5,000 shirts per year and the average sales price per shirt is 50 dollars.
What is the contribution margin per shirt?
Answer by schrammbledeggs(41)   (Show Source):
You can put this solution on YOUR website! Contribution margin is Total Sales - Total Variable Cost...
Total Sales = 5,000 shirts per year * 50 dollars a shirt
Total Sales = $250,000
Total Variable Cost = 30% of $380,000
Total Variable Cost = .30 * 380,000
Total Variable Cost = $114,000
Contribution margin = $250,000 - $114,000
Contribution margin = $136,000
:)
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