The controller of Samson Electronics is evaluating the unit contribution margin for the GPS receivers for the first quarter of the year.If 20 GPS receivers are produced and sold during June at a unit selling price of $100, with a fixed cost per unit of $5, and variable costs totaling $800, how much is the unit contribution margin for the each GPS receiver?

Question

Quizplus · Accepted Answer

The unit contribution margin is calculated as the selling price per unit minus the variable cost per unit. The total variable costs are $800 for 20 units, so the variable cost per unit is $800 / 20 = $40. The selling price per unit is $100, so the unit contribution margin is $100 - $40 = $60. Fixed costs do not affect the calculation of the unit contribution margin.

The Controller of Samson Electronics Is Evaluating the Unit Contribution