To compute the unit contribution margin,__________ should be subtracted from the sales price per unit.

Question

Quizplus · Accepted Answer

Unit contribution margin is the difference between the sales price per unit and all variable costs per unit. Therefore, all variable costs should be subtracted from the sales price per unit to compute the unit contribution margin. Including only variable period costs (answer A) or only variable inventoriable product costs (answer B) would not accurately reflect the total variable costs associated with producing and selling the product. Excluding fixed costs (answer D) would not accurately reflect the total costs associated with producing and selling the product, and would not provide an accurate measure of profitability.

To Compute the Unit Contribution Margin,__________ Should Be Subtracted from the Sales