Dodero Company produces a single product that sells for $100 per unit.Fixed expenses total $12,000 per month,and variable expenses are $60 per unit.The company's sales average 500 units per month.Which of the following statements is correct?

Question

Quizplus · Accepted Answer

The contribution margin per unit is calculated as the selling price per unit minus the variable cost per unit, which is $100 - $60 = $40. The contribution margin ratio is the contribution margin per unit divided by the selling price per unit, which is $40 / $100 = 0.4 or 40%.

Dodero Company Produces a Single Product That Sells for $100