If the selling price per unit is $20 and the contribution margin percentage is 30%,then the variable cost per unit must be $6.

Question

Quizplus · Accepted Answer

If the contribution margin percentage is 30%, it means that the contribution margin per unit is 30% of the selling price. 
Contribution margin per unit = (selling price per unit x contribution margin percentage)/100
Contribution margin per unit = $20 x 30/100 = $6
So, the variable cost per unit would be:
Variable cost per unit = Selling price per unit - Contribution margin per unit 
Variable cost per unit = $20 - $6 
Variable cost per unit = $14

If the Selling Price Per Unit Is $20 and the Contribution