Smart Inc Expects to Produce and Sell 4,000 Units Next Month

Essay

Smart Inc. expects to produce and sell 4,000 units next month. Data on costs follows: $\begin{array}{l}\text { Per unit costs: }\\\begin{array}{lr}\text { Selling sales price } & \$ 80 \\\text { Variable manufacturing costs } & \$ 20 \\\text { Variable selling costs } & \$ 12\end{array}\\\text { Total costs: }\\\begin{array}{lr}\text { Fixed manufacturing costs } & \$ 32,000 \\\text { Fixed selling costs } & \$ 16,000\\\end{array}\end{array}$ A. Calculate the variable cost per unit.
B. Calculate the contribution margin per unit.
C. Calculate the variable cost ratio.
D. Calculate is the contribution margin ratio.