The Goldfarb Company manufactures and sells toasters. Each toaster sells for $23.75 and the variable cost per unit is $16.25. Goldfarb's total fixed costs are $25,000, and budgeted sales are 8,000 units. What is the contribution margin per unit?
A) $16.25.
B) $23.75.
C) $1.25.
D) $7.50.
E) $60,000.

Question

Quizplus · Accepted Answer

Contribution margin per unit = Selling price per unit - Variable cost per unit
Contribution margin per unit = $23.75 - $16.25
Contribution margin per unit = $7.50. Therefore, the best choice is D.

The Goldfarb Company Manufactures and Sells Toasters