Let’s solve this step by step.
We are given a table with three products: Product 1, Product 2, and Product 3. We need to calculate the total contribution margin for each product, then find the overall total contribution margin for all products combined.
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Step 1: Understand what “Contribution Margin” means
Contribution margin = Sales Revenue – Variable Costs
It tells us how much money is left after paying variable costs — this money helps cover fixed costs and then becomes profit.
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Step 2: Look at the data for each product
#### For Product 1:
- Units sold: 10,000
- Selling price per unit: $50 → So total sales = 10,000 × $50 =
$500,000
- Variable cost per unit: $30 → So total variable cost = 10,000 × $30 =
$300,000
- Contribution margin = $500,000 - $300,000 =
$200,000
#### For Product 2:
- Units sold: 8,000
- Selling price per unit: $60 → Total sales = 8,000 × $60 =
$480,000
- Variable cost per unit: $35 → Total variable cost = 8,000 × $35 =
$280,000
- Contribution margin = $480,000 - $280,000 =
$200,000
#### For Product 3:
- Units sold: 5,000
- Selling price per unit: $70 → Total sales = 5,000 × $70 =
$350,000
- Variable cost per unit: $40 → Total variable cost = 5,000 × $40 =
$200,000
- Contribution margin = $350,000 - $200,000 =
$150,000
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Step 3: Add up all contribution margins
Total contribution margin = Product 1 + Product 2 + Product 3
= $200,000 + $200,000 + $150,000
=
$550,000
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Final Answer:
$550,000
Parent Tip: Review the logic above to help your child master the concept of life insurance worksheet.
