Variable costs for Abbey, Inc.are 25% of sales.Its selling price is $80 per unit.If Abbey sells one unit more than break-even units, how much will profit increase?
A)$60
B)$20
C)$25
D)$320

Question

Quizplus · Accepted Answer

The selling price per unit is $80, and the variable cost is 25% of $80, which is $20. Therefore, the contribution margin per unit is $80 - $20 = $60. Selling one unit more than the break-even point increases profit by the contribution margin, which is $60.

Variable Costs for Abbey, Inc