If a company has a selling price of $15 per unit, variable cost of $9 per unit,

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Question: If a company has a selling price of $15 per unit, variable cost of $9 per unit, and fixed costs of $30,000, what is the contribution margin per unit?

Options:

Correct Answer: $6

Solution:

Contribution margin = Selling price - Variable cost = $15 - $9 = $6

If a company has a selling price of $15 per unit, variable cost of $9 per unit,

Practice Questions

If a company has a selling price of $15 per unit, variable cost of $9 per unit, and fixed costs of $30,000, what is the contribution margin per unit?

Questions & Step-by-Step Solutions

If a company has a selling price of $15 per unit, variable cost of $9 per unit, and fixed costs of $30,000, what is the contribution margin per unit?

Step 1: Identify the selling price per unit, which is $15.
Step 2: Identify the variable cost per unit, which is $9.
Step 3: Use the formula for contribution margin, which is: Contribution margin = Selling price - Variable cost.
Step 4: Substitute the values into the formula: Contribution margin = $15 - $9.
Step 5: Calculate the result: $15 - $9 = $6.

Contribution Margin – The contribution margin is the amount per unit that contributes to covering fixed costs and generating profit, calculated as the difference between selling price and variable cost.

If a company has a selling price of $15 per unit, variable cost of $9 per unit,

What’s inside this PDF?

If a company has a selling price of $15 per unit, variable cost of $9 per unit,

Practice Questions

Questions & Step-by-Step Solutions

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