Asked by Shana Llewellyn on May 09, 2024
Verified
Wilson's Meats has computed their fixed costs to be $1.32 for every kilogram of meat they sell given an average daily sales level of 500 kilograms. They charge $8.56 per kilogram of top-grade ground beef. The variable cost per kilogram is $6.58. What is the contribution margin per kilogram of ground beef sold?
A) $.66
B) $1.32
C) $1.98
D) $6.58
E) $8.56
Fixed Costs
Costs that do not change with the level of output or sales over a certain period, such as rent or salaries.
Contribution Margin
The contribution margin represents the portion of sales revenue that is not consumed by variable costs and is available to cover fixed costs and generate profit.
Variable Cost
Business expenditures that adjust based on the activity level of the enterprise.
- Understand the link between variable and fixed costs and how they influence production activities.
- Acquire knowledge on the relevance of break-even points in financial scrutiny.
Verified Answer
Learning Objectives
- Understand the link between variable and fixed costs and how they influence production activities.
- Acquire knowledge on the relevance of break-even points in financial scrutiny.
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