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If a company has a contribution margin of $15 per unit and sells 2,000 units, wh

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Question: If a company has a contribution margin of $15 per unit and sells 2,000 units, what is the total contribution margin?

Options:

  1. $30,000
  2. $25,000
  3. $20,000
  4. $15,000

Correct Answer: $30,000

Solution: 

Total contribution margin = Contribution margin per unit * Number of units = $15 * 2,000 = $30,000

If a company has a contribution margin of $15 per unit and sells 2,000 units, wh

Practice Questions

Q1
If a company has a contribution margin of $15 per unit and sells 2,000 units, what is the total contribution margin?
  1. $30,000
  2. $25,000
  3. $20,000
  4. $15,000

Questions & Step-by-Step Solutions

If a company has a contribution margin of $15 per unit and sells 2,000 units, what is the total contribution margin?
  • Step 1: Identify the contribution margin per unit, which is given as $15.
  • Step 2: Identify the number of units sold, which is given as 2,000.
  • Step 3: Multiply the contribution margin per unit by the number of units sold: $15 * 2,000.
  • Step 4: Calculate the result of the multiplication, which is $30,000.
  • Step 5: The total contribution margin is $30,000.
  • Contribution Margin – The contribution margin is the amount per unit that contributes to covering fixed costs and generating profit, calculated as sales price per unit minus variable costs per unit.
  • Total Contribution Margin Calculation – The total contribution margin is calculated by multiplying the contribution margin per unit by the total number of units sold.
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