Bluegill Company Sells 45,000 Units at $18 Per Unit

question 203

Essay

Bluegill Company sells 45,000 units at $18 per unit. Fixed costs are $62,000, and income from operations is $298,000. Determine the
(a) variable cost per unit,
(b) unit contribution margin, and
(c) contribution margin ratio.

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Definitions:

Law of Demand

A fundamental economic principle stating that, all else being equal, as the price of a good increases, consumer demand for the good decreases, and vice versa.

Average Price

The mean price of a good or service, calculated by dividing the total revenue by the quantity sold.

Equilibrium Price

The cost at which the amount of a product consumers want to buy matches the amount producers are willing to sell, leading to equilibrium in the market.

Gigabyte

A unit of digital information storage equivalent to approximately 1 billion bytes (1,000 megabytes).