Menlove Company had the following income statement for the most recent year: Given this data, the unit contribution margin was:

Question

Menlove Company had the following income statement for the most recent year:  Given this data, the unit contribution margin was:

Quizplus · Accepted Answer

To determine the unit contribution margin, we need to divide the total contribution margin by the number of units sold.

Total contribution margin = Sales revenue - Variable expenses 
Total contribution margin = $750,000 - ($150,000 + $300,000) 
Total contribution margin = $300,000

Number of units sold = (Sales revenue) / (selling price per unit) 
Number of units sold = $750,000 / $25 per unit 
Number of units sold = 30,000 units

Unit contribution margin = Total contribution margin / number of units sold 
Unit contribution margin = $300,000 / 30,000 units 
Unit contribution margin = $10 per unit

Therefore, the unit contribution margin is $10 per unit, which is option C) $6 per unit.

Menlove Company Had the Following Income Statement for the Most