A manufacturing company is considering producing a new product. The variable cost of the new product is $60 per unit, and the total fixed costs are $75,000 for a month. The company could produce 1,500 units per month, and sell the product for $125 each. Calculate the unit contribution margin.

Question

Quizplus · Accepted Answer

The unit contribution margin is calculated as the selling price per unit minus the variable cost per unit. Therefore, it is $125 - $60 = $65.

A Manufacturing Company Is Considering Producing a New Product