# Metrics 4

47 views4 pages
Published on 15 May 2011
School
Ryerson University
Department
Marketing
Course
MKT 100
Worksheet: Metric 4 Contribution Margin
1)Mohan, an artist, draws caricatures on the waterfront pier. It costs
him approximately \$5 in materials (paper and markers) for each
caricature he makes. He sells each caricature for \$20. Calculate the
contribution margin in terms of dollars and percent.
Answer:
Contribution Margin (\$) = Revenue COGS
= \$20 - \$5
= \$15
Contribution Margin (%) = [Contribution per Unit (\$) /
Sale Price per Unit (\$)] * 100%
= [(Sale Price per Unit Variable Cost per
Unit) / Sale Price per Unit] *100%
= [(\$20 - \$5) / \$20] * 100%
= [\$15 / \$20] * 100%
= 0.75 * 100%
= 75%
2)The Hotel Grill Bar sells a set lunch for \$12. The food cost of sales used
in producing each set lunch is \$5. Additional variable costs are \$3 per
lunch. The fixed costs of the restaurant are \$3 per meal. What is the
contribution margin expressed in dollars and percent?
Variable Expenses = \$5 + \$3
= \$8
Contribution Margin (\$) = Revenue Variable Expense
= \$12 - \$8
= \$4
Contribution Margin (%) = [Contribution per Unit (\$) /
Sale Price per Unit (\$)] * 100%
= [(Sale Price per Unit Variable Cost per
Unit) / Sale Price per Unit] * 100%
= [(\$12 - \$8) / \$12] * 100%
= \$4 / \$12 * 100%
= 0.33 * 100%
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## Document Summary

Worksheet: metric 4 contribution margin: mohan, an artist, draws caricatures on the waterfront pier. It costs him approximately in materials (paper and markers) for each caricature he makes. Calculate the contribution margin in terms of dollars and percent. = 75: the hotel grill bar sells a set lunch for . The food cost of sales used in producing each set lunch is . The fixed costs of the restaurant are per meal. = 33. 3: you are an online retailer of cds, promoting sales via a no postage and packaging" offer. You purchase your cds from record companies for . 75. Packaging and a padded envelope cost . 00 per cd; and postage is . 00. Variable expenses = . 75 + . 00 + . 00. Contribution margin (\$) = revenue variable expense. = [(sale price per unit variable cost per. = 13: you are the owner of an exclusive nightclub that is considering holding a new year"s eve party.