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:

Journal Entries

Entries made in the accounting records to document financial transactions, updating account balances accordingly.

Noncumulative

A term often referring to certain preferred stock dividends that do not accumulate if unpaid, meaning if a dividend is skipped, it is not owed in the future.

Nonparticipating

A term often related to insurance policies or preferred stocks that do not have the right to share in additional earnings or dividends beyond a specified amount.

Journal Entries

Journal entries are the method of recording all the financial transactions of a business in the accounting system, as part of the double-entry bookkeeping system.