The selling price per unit less the variable cost per unit is the:
A)contribution margin per unit
B)margin of safety
C)fixed cost per unit
D)gross margin

Question

Quizplus · Accepted Answer

The contribution margin per unit is the amount of revenue that goes towards covering fixed costs and generating profit. It is calculated by subtracting the variable cost per unit from the selling price per unit. Therefore, the correct answer is A- contribution margin per unit. The margin of safety is the excess of expected sales over the break-even point and is not related to this formula. Fixed cost per unit is a constant amount and does not depend on the selling price or variable cost. Gross margin is the difference between revenue and cost of goods sold, and does not include fixed costs.

The Selling Price Per Unit Less the Variable Cost Per