The contribution margin per unit equals:Group of answer choicesselling price - fixed costs per unitselling price - variable costs per unitfixed cost - contribution margin ratioselling price - costs of good sold
Question
The contribution margin per unit equals:Group of answer choicesselling price - fixed costs per unitselling price - variable costs per unitfixed cost - contribution margin ratioselling price - costs of good sold
Solution
The answer is "selling price - variable costs per unit".
Here's why:
-
The contribution margin per unit is a measure of how much each unit sold contributes to covering fixed costs and then generating profit.
-
It is calculated by subtracting the variable cost per unit from the selling price per unit. Variable costs are those costs that change directly with the level of output or sales, such as raw materials or direct labor costs.
-
Fixed costs per unit, contribution margin ratio, and cost of goods sold are not used in the calculation of the contribution margin per unit.
Therefore, the contribution margin per unit equals the selling price per unit minus the variable costs per unit.
Similar Questions
In cost-volume-profit analysis, the contribution margin per unit is:Multiple ChoiceThe same as the contribution margin ratio.Selling price per unit less total cost per unit.Selling price per unit less variable costs per unit.Selling price per unit less fixed costs per unit.Selling price per unit less cost of goods sold per unit.
The contribution margin ratio:Multiple ChoiceIs the percent of each sales dollar that remains after deducting the unit variable cost.Is the percent of each sales dollar that remains after deducting the unit fixed cost.Is the percent of each sales dollar that remains to cover the variable and fixed costs.Cannot be used in conjunction with other analytical tools.Is the same as the contribution margin per unit.
If the contribution margin per unit is $15 and selling price per unit is $20, the contribution margin ratio is:Group of answer choices133%.75%.60%.80%.
The contribution margin ratio can be calculated as:Group of answer choicestotal contribution margin divided by total sales.contribution margin per unit multiplied by selling price per unit.all of the options are correct.total sales divided by total contribution margin.
The difference between selling price per unit and variable costs per unit is the:Multiple ChoiceGross margin per unit.Fixed cost per unit.Margin of safety per unit.Contribution margin per unit.Gross profit from sales.
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.