A jeans maker is designing a new line of jeans called the Slims. The jeans will sell

Question:

A jeans maker is designing a new line of jeans called the Slims. The jeans will sell for $ 205 per pair and cost $ 164 per pair in variable costs to make.

(1) Compute the contribution margin per pair.

(2) Compute the contribution margin ratio.

(3) Describe what the contribution margin ratio reveals about this new jeans line.

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...