Variable costs for Hogan, Inc. are 25% of sales. Its selling price is $80 per unit. If Hogan sells one unit more than break-even units, how much will profit increase?
A) $60.00
B) $20.00
C) $26.66
D) $320.00

Question

Quizplus · Accepted Answer

The contribution margin per unit is the selling price minus variable costs, which is $80 - ($80 * 0.25) = $60. Selling one unit more than break-even adds this contribution margin to profit, so profit increases by $60.

Variable Costs for Hogan, Inc