Protect Ltd a small tailor produces face masks. The monthly fixed costs for rent, insurance, maintenance, cleaning etc. is budgeted to EUR 15000.
Protect Ltd gets an offer for 3000 masks for EUR 17 per unit.
The variable cost per unit (material) is budgeted to EUR 8 per unit.
Required: Mark the correct answers.
Hint: round to whole-numbers

Question

Protect Ltd a small tailor produces face masks. The monthly fixed costs for rent, insurance, maintenance, cleaning etc. is budgeted to EUR 15000.

Protect Ltd gets an offer for 3000 masks for EUR 17 per unit.

The variable cost per unit (material) is budgeted to EUR 8 per unit.

Required: Mark the correct answers.

Hint: round to whole-numbers

Accepted Answer

The contribution margin per unit is 17-8

Accepted Answer

If contribution margin is positiv, the business should accept the offer.

Answer

The fixed cost of 15000 is irrelevant for the decision.

Answer

The contribution margin per unit is 8-17

Answer

The total contribution is 15000-(17-8*3000)

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