Laner Company has the following data for the production and sale of 2,000 units. What is the contribution margin per unit?
A)$70
B)$320
C)$370
D)$430

Question

Laner Company has the following data for the production and sale of 2,000 units.  What is the contribution margin per unit?
A)$70 
B)$320 
C)$370 
D)$430

Quizplus · Accepted Answer

Contribution margin per unit is calculated as (sales price per unit - variable cost per unit). From the data provided, we can see that the total sales revenue for 2,000 units is $1,400,000 and the total variable cost is $440,000. Therefore, the contribution margin per unit is ($1,400,000 / 2,000) - ($440,000 / 2,000) = $700 - $220 = $480. Therefore, the correct answer is C, which is the closest option to $480.

Laner Company Has the Following Data for the Production and Sale