Weed, Inc.variable costs are 25% of sales.Its selling price is $95 per unit.If Weed sells one unit more than break-even units, how much will profit increase?

Question

Quizplus · Accepted Answer

The contribution margin per unit is the selling price minus variable costs, which is $95 - ($95 * 0.25) = $71.25. Selling one unit more than break-even increases profit by the contribution margin per unit, which is $71.25.

Weed, IncVariable Costs Are 25% of Sales