EXERCISE 5-5 (20 MINUTES)

2. - SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH05 COST BEHAIVIOR ANALYSSIS AND USE
SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH05 COST BEHAIVIOR ANALYSSIS AND USE
2. Since 200 pairs of skis were sold and the contribution margin totaled $48,000 for the quarter, the contribution of each pair of skis toward covering fixed costs and toward earning of profits was $240 ($48,000 ÷ 200 pairs = $240 per pair). Another way to compute the $240 is: Selling price per pair ... $750 Less variable expenses: Cost per pair... $450 Selling expenses ... 50 Administrative expenses ($2,000 ÷ 200 pairs) ... 10 510 Contribution margin per pair... $240