Home / Assignment Help / As the product life cycle curve approaches the decline state, a company can attempt to jumpstart the curve again by doing which of the following? find new users and new uses increase the size of their sales force increase the advertising budget increase free samples as incentives to buy none of the above

As the product life cycle curve approaches the decline state, a company can attempt to jumpstart the curve again by doing which of the following? find new users and new uses increase the size of their sales force increase the advertising budget increase free samples as incentives to buy none of the above

The Contribution Margin per unit (CM) can be calculated
from the difference of Selling Price per unit (SP) and Total Expenses per unit
(TE).

 

First, let’s calculate the value of SP:

SP = Sales / Units sold

SP = $1,043,400 / 22,200 units sold

SP = $47

 

Second, calculate all expenses:

Direct materials per unit = $234,948 / 27,970 units
manufactured = $8.4

Direct labor per unit = $131,459 / 27,970 units
manufactured = $4.7

Variable manufacturing overhead per unit = $240,542 / 27,970
units manufactured = $8.6

Variable selling expenses per unit = $113,220 / 22,200
units sold = $5.1

TE = $26.8

 

Therefore the CM is:

CM = SP – TE

CM = $47 – $26.8

CM = $20.2 per unit

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