Bargain Town recently reported sales revenues of $800,000, a total contribution margin of $300,000, and ﬁxed costs of $180,000.If sales volume amounted to 10,000 units, the company's variable cost per unit must have been:

Question

Quizplus · Accepted Answer

Contribution Margin per unit = Sales price per unit - Variable cost per unit
Contribution Margin per unit = Total Contribution Margin / Sales volume
$30 = $300,000 / 10,000 units

Contribution Margin per unit = Sales price per unit - Variable cost per unit
$30 = Sales price per unit - Variable cost per unit
$30 = $ Sales price per unit - $ Variable cost per unit
$30 = $ Sales - $ Variable cost
$30 = $800,000 - ($10,000 * $ Variable cost per unit) - $180,000
$30 = $620,000 - ($10,000 * $ Variable cost per unit)
($10,000 * $ Variable cost per unit) = $590,000
$ Variable cost per unit = $59
Therefore, the answer is C.

Bargain Town Recently Reported Sales Revenues of $800,000, a Total