Asked by
Andrew Kensey
on Nov 07, 2024Verified
A project has expected sales of 21,000 units at a price of $14.99, variable costs of $9.03, and fixed costs of $58,590. What is the contribution margin per unit?
A) $2.79
B) $3.17
C) $5.96
D) $9.03
E) $14.99
Contribution Margin
The selling price per unit minus the variable cost per unit, used to cover fixed costs and profits.
Variable Costs
Expenses that vary in relation to the amount of production or the scale of business operations.
Fixed Costs
Expenses such as rent, salaries, and insurance that remain constant regardless of the amount of production or sales.
- Evaluate the contribution margin per unit based on expected sales, price, variable costs, and fixed costs.
Verified Answer
MJ
Learning Objectives
- Evaluate the contribution margin per unit based on expected sales, price, variable costs, and fixed costs.