Baird Corporation produced 216000 watches that it sold for 2

Baird Corporation produced 216,000 watches that it sold for $20 each during 2019. The company determined that fixed manufacturing cost per unit was $8 per watch. The company reported a $1,296,000 gross margin on its 2019 financial statements Required Determine the variable cost per unit, the total variable cost, and the total contribution margin Variable cost per unit Total variable cost Total contribution margin

Solution

Cost of goods sold = Sales-Gross margin = (216000*20)-1296000= 3024000 Total variable cost = 3024000-(216000*8)= 1296000 Variable cost per unit = 1296000/216000= 6 Total variable cost = 1296000 Total contribution margin = 216000*(20-6)= 3024000