A pants maker is designing a new line of pants called the Redbird The pants will sell for $325 per pair and cost $260 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 abo...

1 Contribution margin Selling price Variable costs 325 26 ...

A pants maker is designing a new line of pants called the Redbird. The pants will sell

Question:

A pants maker is designing a new line of pants called the Redbird. The pants will sell for $325 per pair and cost $260 per pair in variable costs to make.
(1) Compute the per pair.
(2) Compute the ratio.
(3) Describe what the ratio reveals about this new pants 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...