A manufacturer of premium wire strippers has supplied the following data:

-The company's unit contribution margin is closest to:
A) $2.25 per unit
B) $5.55 per unit
C) $1.65 per unit
D) $6.60 per unit

Question

A manufacturer of premium wire strippers has supplied the following data:
 
-The company's unit contribution margin is closest to:
A) $2.25 per unit 
B) $5.55 per unit 
C) $1.65 per unit 
D) $6.60 per unit

Quizplus · Accepted Answer

Contribution margin = Sales - Variable expenses
= $4,176,000 - ($2,871,000 + $348,000)
= $4,176,000 - $3,219,000 = $957,000
Unit CM = Contribution margin ÷ Unit sales
= $957,000 ÷ 580,000 units = $1.65 per unit

A Manufacturer of Premium Wire Strippers Has Supplied the Following