Narchie sells a single product for $50. Variable costs are 60% of the selling price, and the company has fixed costs that amount to $400,000. Current sales total 16,000 units.
Each unit that Narchie sells will:

Question

Quizplus · Accepted Answer

The selling price per unit is $50, and the variable cost per unit is 60% of $50, which is $30. Therefore, the contribution margin per unit (selling price - variable cost) is $20. Each unit sold increases profit by this contribution margin of $20.

Narchie Sells a Single Product for $50