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If the selling price per unit is $15 and the variable cost per unit is $5, what

Practice Questions

Q1
If the selling price per unit is $15 and the variable cost per unit is $5, what is the contribution margin per unit?
  1. $10
  2. $5
  3. $15
  4. $0

Questions & Step-by-Step Solutions

If the selling price per unit is $15 and the variable cost per unit is $5, 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 $5.
  • 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 = $15 - $5.
  • Step 5: Calculate the result: $15 - $5 = $10.
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