Calculate the per-unit contribution margin of a product that has a sale price of $200 if the variable costs per unit are $65.
Question
Calculate the per-unit contribution margin of a product that has a sale price of 65.
Solution
To calculate the per-unit contribution margin, you subtract the variable costs per unit from the sale price per unit.
Here's how you do it:
Step 1: Identify the sale price per unit. In this case, it's $200.
Step 2: Identify the variable costs per unit. In this case, it's $65.
Step 3: Subtract the variable costs per unit from the sale price per unit.
So, 65 (variable costs per unit) = $135.
Therefore, the per-unit contribution margin of the product is $135.
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