A company that makes organic fertilizer has supplied the following data:

-The company's unit contribution margin is closest to:
A) $4.50 per unit
B) $6.90 per unit
C) $3.60 per unit
D) $4.20 per unit

Question

A company that makes organic fertilizer has supplied the following data:
 
-The company's unit contribution margin is closest to:
A) $4.50 per unit 
B) $6.90 per unit 
C) $3.60 per unit 
D) $4.20 per unit

Quizplus · Accepted Answer

Selling price per unit = $1,560,000 ÷ 200,000 units = $7.80 per unit
Variable expense per unit = ($660,000 + $180,000) ÷ 200,000 units
= $840,000 ÷ 200,000 units = $4.20 per unit
Unit CM = Selling price per unit - Variable expenses per unit
= $7.80 per unit - $4.20 per unit = $3.60 per unit

A Company That Makes Organic Fertilizer Has Supplied the Following