No contribution margin is provided by selling one unit of a product at a price of $35 if variable production costs are $20,variable general and administrative costs are $5,and fixed costs are $10 per unit.

Question

Quizplus · Accepted Answer

To calculate the contribution margin, we need to subtract the variable costs from the selling price. 
Contribution margin = Selling price - Variable costs
Contribution margin = $35 - ($20+$5) = $10
Since the contribution margin is $10 and the fixed costs are $10, there is no profit or loss made by selling one unit of the product. Therefore, the statement "No contribution margin is provided by selling one unit of a product at a price of $35 if variable production costs are $20, variable general and administrative costs are $5, and fixed costs are $10 per unit" is false.

No Contribution Margin Is Provided by Selling One Unit of a Product