Question: how to calculate total contribution margin on lost sales?
Answer: Total contribution margin on lost sales Transfer Variable + price cost Number of units transferred ³ ( ) $40 - $18 × 22,000 Transfer $27 + = $27.00 + $24.20 = $51.20 price 20,000 ³ In this case, the opportunity cost of producing one of the special batteries is $24.20, the average amount of lost contribution margin.