5. What is the Contribution Margin Ratio (CMR) if the price is $8.82 per gallon? IceLess is an anti-icing solution sold in gallon plastic jugs. It is poured into the windshield washer bottle of your car. Wash your windshield and the solution prevents the glass from icing over for about four hours. Production incurs the following fixed and variable costs. It is priced initially at $5.50 per gallon. Fixed costs (per year) Variable Costs per gallon Rent: $18000 Glycol: $1.50 Utilities: 13200 FreezeFree 312: .50 Managerial salaries: 20000 Mfg labor: .20 Flammability permit: 12000 Packaging: .20 Other fixed expense: 2400 Inert ingredients: .60 Total fixed: $65600 Advertising: .30
5. What is the Contribution Margin Ratio (CMR) if the price is $8.82 per gallon?
IceLess is an anti-icing solution sold in gallon plastic jugs. It is poured into the windshield washer bottle of your car. Wash your windshield and the solution prevents the glass from icing over for about four hours. Production incurs the following fixed and variable costs. It is priced initially at $5.50 per gallon.
Fixed costs (per year) Variable Costs per gallon
Rent: $18000 Glycol: $1.50
Utilities: 13200 FreezeFree 312: .50
Managerial salaries: 20000 Mfg labor: .20
Flammability permit: 12000 Packaging: .20
Other fixed expense: 2400 Inert ingredients: .60
Total fixed: $65600 Advertising: .30
Total: $3.30
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