My Learning Cart
?
Categories
Account

A product has a selling price of $20, variable cost of $12, and fixed costs of $

₹0.0
Login to Download
  • 📥 Instant PDF Download
  • ♾ Lifetime Access
  • 🛡 Secure & Original Content

What’s inside this PDF?

Question: A product has a selling price of $20, variable cost of $12, and fixed costs of $3,000. What is the contribution margin per unit?

Options:

  1. $8
  2. $7
  3. $6
  4. $5

Correct Answer: $8

Solution: 

Contribution margin per unit = Selling price - Variable cost = $20 - $12 = $8

A product has a selling price of $20, variable cost of $12, and fixed costs of $

Practice Questions

Q1
A product has a selling price of $20, variable cost of $12, and fixed costs of $3,000. What is the contribution margin per unit?
  1. $8
  2. $7
  3. $6
  4. $5

Questions & Step-by-Step Solutions

A product has a selling price of $20, variable cost of $12, and fixed costs of $3,000. What is the contribution margin per unit?
  • Step 1: Identify the selling price of the product, which is $20.
  • Step 2: Identify the variable cost of the product, which is $12.
  • Step 3: Use the formula for contribution margin per unit: Contribution margin per unit = Selling price - Variable cost.
  • Step 4: Substitute the values into the formula: Contribution margin per unit = $20 - $12.
  • Step 5: Calculate the result: $20 - $12 = $8.
  • Contribution Margin – The contribution margin per unit is calculated by subtracting the variable cost from the selling price, indicating how much each unit contributes to covering fixed costs and generating profit.
Soulshift Feedback ×

On a scale of 0–10, how likely are you to recommend The Soulshift Academy?

Not likely Very likely
Home Practice Performance eBooks