If a company's sales price for its product is $40, its variable cost percentage is 30%, its sales are $200 000, and its fixed costs are $100 000, what will be its contribution margin per unit?

Question

Quizplus · Accepted Answer

The contribution margin per unit is calculated by subtracting the variable cost per unit from the sales price per unit. The variable cost per unit is 30% of $40, which is $12. Therefore, the contribution margin per unit is $40 - $12 = $28.

If a Company's Sales Price for Its Product Is $40