Asked by Hailee Ramirez on Apr 28, 2024
Verified
The selling price of a widget is $15 and the fixed cost per month is $4,800. The variable cost per widget is $9. Calculate the contribution margin per unit.
A) $24
B) $9
C) $8
D) $6
E) $5
Variable Cost
Costs that vary in direct proportion to changes in levels of production or business activity, such as materials and labor.
Fixed Cost
A cost that does not change with the volume of sales.
- Determine and apprehend the value of the contribution margin on both a per-unit basis and in aggregate.
Verified Answer
MW
Makaila WargaMay 04, 2024
Final Answer :
D
Explanation :
The contribution margin per unit is calculated by subtracting the variable cost per unit from the selling price per unit. Therefore, $15 - $9 = $6.
Learning Objectives
- Determine and apprehend the value of the contribution margin on both a per-unit basis and in aggregate.
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