A division sold 200,000 calculators during 2017: $\begin{array}{lr}\text { Sales }&&\$2,000,000\
\text { Variable costs: }\
\text { Materials } & \$ 380,000 \
\text { Order processing } & 150,000 \
\text { Billing labor } & 110,000 \
\text { Selling expenses } & 60,000\
\text { Total variable costs }&&700,000\\text { Fixed costs }&&1,000,000
\end{array}$ How much is the unit contribution margin?

Question

Quizplus · Accepted Answer

The unit contribution margin is calculated by subtracting the variable cost per unit from the selling price per unit. The total variable costs are $700,000 for 200,000 calculators, so the variable cost per unit is $700,000 / 200,000 = $3.50. The selling price per unit is $2,000,000 / 200,000 = $10.00. Therefore, the unit contribution margin is $10.00 - $3.50 = $6.50.

A Division Sold 200,000 Calculators During 2017 How Much Is the Unit Contribution Margin? A)$1

A Division Sold 200,000 Calculators During 2017 How Much Is the Unit Contribution Margin?
A)$1