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A company sells a product for $50 per unit. If the variable cost per unit is $30
A company sells a product for $50 per unit. If the variable cost per unit is $30, what is the contribution margin per unit?
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Q1
A company sells a product for $50 per unit. If the variable cost per unit is $30, what is the contribution margin per unit?
$20
$30
$50
$10
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Contribution margin per unit = Selling price - Variable cost = $50 - $30 = $20.
Questions & Step-by-step Solutions
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Q
Q: A company sells a product for $50 per unit. If the variable cost per unit is $30, what is the contribution margin per unit?
Solution:
Contribution margin per unit = Selling price - Variable cost = $50 - $30 = $20.
Steps: 6
Show Steps
Step 1: Identify the selling price of the product, which is $50.
Step 2: Identify the variable cost per unit, which is $30.
Step 3: Use the formula for contribution margin per unit: Contribution margin = Selling price - Variable cost.
Step 4: Substitute the values into the formula: Contribution margin = $50 - $30.
Step 5: Calculate the result: $50 - $30 = $20.
Step 6: The contribution margin per unit is $20.
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