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    Computing the Contribution Margin and Cont Margin Ratio

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    Fixed expenses for each new edition of the book

    Copy editing $3,000.00
    Art work $1,000.00
    Typesetting $36,000.00

    Variable expenses per copy of the book
    Printing and binding $1.60
    Bookstore discounts $2.00
    Salespersons commission $0.25
    Author Royalities $1.00

    Each book sells for $10 per copy

    Question 1:
    What would be the contribution margin for each copy of the book ?
    Question 2:
    The contribution margin ratio for the textbook is?

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    Solution Preview

    The contribution margin per unit is the excess of the sales ...

    Solution Summary

    Using an Excel 2007 spreadsheet, this solution demonstrates the computation of the contribution margin and the contribution margin ratio.