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Tadfield Dairy Farm sells a tub of ice cream for $9. Variable costs are $4.20 per unit and fixed costs for the period are $2,400. What is the contribution margin per unit? Group of answer choices None of the other options $4.20 $500 $4.80 $9.00

Question

Tadfield Dairy Farm sells a tub of ice cream for 9.Variablecostsare9. Variable costs are 4.20 per unit and fixed costs for the period are $2,400. What is the contribution margin per unit?

Group of answer choices

None of the other options

$4.20

$500

$4.80

$9.00

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Solution

The contribution margin per unit is calculated by subtracting the variable cost per unit from the selling price per unit.

In this case, the selling price per unit is 9andthevariablecostperunitis9 and the variable cost per unit is 4.20.

So, the contribution margin per unit is 99 - 4.20 = $4.80.

Therefore, the correct answer is $4.80.

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