The selling price per unit less the variable cost per unit is the ________.
A) fixed cost per unit
B) gross margin
C) margin of safety
D) contribution margin per unit

Question

Quizplus · Accepted Answer

The difference between the selling price per unit and the variable cost per unit is known as the contribution margin per unit. It represents the amount that each unit contributes towards covering the fixed costs and generating profits. Therefore, option D is the correct answer. Option A (fixed cost per unit) is not relevant to the calculation of contribution margin. Option B (gross margin) is the difference between the selling price and the cost of goods sold, which includes both fixed and variable costs. Option C (margin of safety) refers to the amount by which sales can decline before the company will start to incur losses.

The Selling Price Per Unit Less the Variable Cost Per