The income statement for Thomas Manufacturing Company for 2004 is as follows: What is the contribution margin per unit?

Question

Quizplus · Accepted Answer

Contribution margin per unit is calculated as selling price per unit minus variable cost per unit.

Contribution margin per unit = (£48 - £32)/10 = £16/10 = £1.60

Therefore, the correct option is C) £4.80 (which is the contribution margin per unit multiplied by the number of units sold, i.e., £1.60 x 3,000 = £4,800). The other options are incorrect as they do not represent the contribution margin per unit.

The Income Statement for Thomas Manufacturing Company for 2004 Is