A proposed project has estimated sales of 3,300 units per year,± 4 percent; a sales price of $23 a unit,± 1 percent; variable costs per unit of $12.60,± 2 percent; annual fixed costs of $16,200; and annual depreciation of $3,100.What is the contribution margin under the expected scenario?

Question

Quizplus · Accepted Answer

The contribution margin per unit is calculated as the sales price per unit minus the variable costs per unit. Under the expected scenario, the sales price per unit is $23 and the variable costs per unit are $12.60. Therefore, the contribution margin per unit is $23 - $12.60 = $10.40.

A Proposed Project Has Estimated Sales of 3,300 Units Per