Wilson's Meats has computed its fixed costs to be $.60 for every pound of meat it sells given an average daily sales level of 500 pounds. It charges $3.89 per pound of top-grade ground beef. The variable cost per pound is $2.99. What is the contribution margin per pound of ground beef sold?
A) $0.30
B) $0.60
C) $0.90
D) $2.99
E) $3.89

Question

Quizplus · Accepted Answer

Contribution margin per pound of ground beef sold = Selling price per unit - Variable cost per unit
= $3.89 - $2.99
= $0.90

Therefore, the contribution margin per pound of ground beef sold is $0.90.

Wilson's Meats Has Computed Its Fixed Costs to Be