Question

COLLARS LEASHES HARNESSES

Sales Price per Unit
Variable Cost per Unit

Contribution Margin analysis

Answer 1

To conduct a contribution margin analysis for collars, leashes, and harnesses, we need to define the following components for each product:

1. **Sales Price per Unit**: The price at which each unit is sold.
2. **Variable Cost per Unit**: The cost directly associated with producing or acquiring each unit.
3. **Contribution Margin**: This is calculated as Sales Price per Unit minus Variable Cost per Unit.

The contribution margin is helpful in determining how much each product contributes to covering fixed costs and generating profit after accounting for the variable costs.

Here's how you can structure the analysis in a table format:

| Item | Sales Price per Unit | Variable Cost per Unit | Contribution Margin (Unit) |
|--------------|-----------------------|------------------------|----------------------------|
| Collars | | | |
| Leashes | | | |
| Harnesses | | | |

### Example Calculation
Suppose you have the following hypothetical numbers:

- **Collars**:
- Sales Price: $20
- Variable Cost: $10
- Contribution Margin: $20 - $10 = $10

- **Leashes**:
- Sales Price: $15
- Variable Cost: $7
- Contribution Margin: $15 - $7 = $8

- **Harnesses**:
- Sales Price: $25
- Variable Cost: $15
- Contribution Margin: $25 - $15 = $10

Now, the table would look like this:

| Item | Sales Price per Unit | Variable Cost per Unit | Contribution Margin (Unit) |
|--------------|-----------------------|------------------------|----------------------------|
| Collars | $20 | $10 | $10 |
| Leashes | $15 | $7 | $8 |
| Harnesses | $25 | $15 | $10 |

### Conclusion
By filling in the sales price and variable costs for each product, you can easily calculate the contribution margin. This analysis can further be utilized to assess pricing strategies, evaluate product performance, and make informed business decisions regarding which products to promote or discontinue.