Reference no: EM132576048

Jimbob Co. is a merchandising company that buys and resells tires for rally race cars. The company's income statements for the last two years are given below:

                                              Last year                      This year

Units sold                          2,200                          2,000

Sales                                   $330,000                    $300,000

Less cost of goods sold               220,000                     200,000

Gross margin                              110,000                 100,000

Less operating expenses                     65,000               60,000

Net income                                 $45,000                   $40,000

The company has no beginning or ending inventories.

Required:

Question a. Estimate the company's total variable cost per unit for operating expenses.

Question b. What is the company's total of fixed costs per year?

Question c. Compute the company's contribution margin for this year.