If the selling price is $300 and the variable cost is $180, what is the contribu

Practice Questions

Q1
If the selling price is $300 and the variable cost is $180, what is the contribution margin per unit?
  1. $120
  2. $180
  3. $300
  4. $60

Questions & Step-by-Step Solutions

If the selling price is $300 and the variable cost is $180, what is the contribution margin per unit?
  • Step 1: Identify the selling price, which is $300.
  • Step 2: Identify the variable cost, which is $180.
  • 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 = $300 - $180.
  • Step 5: Calculate the result: $300 - $180 = $120.
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