Question - The following data have been provided by a retailer that sells a single product:
This Year Last Year
Units Sold 200,000 150,000
Sales Revenue $1,000,000 $750,000
Less: Cost of Goods Sold $ 700,000 $525,000
Gross Margin $ 300,000 $225,000
Less: Operating Expenses $ 222,000 $210,000
Operating Income $ 78,000 $ 15,000
1. What is the best estimate of the company's variable operating expenses per unit?
A) $0.24 per unit. B) $0.71 per unit. C) $0.90 per unit. D) $4.17 per unit.
2. What is the best estimate of the company's total fixed operating expenses per year?
A) $ 0. B) $ 44,000. C) $ 80,000. D) $174,000.
3. What is the best estimate of the company's contribution margin for this year?
A) $252,000. B) $300,000. C) $158,000. D) $120,000.