Use the following information to answer the following Questions
Narchie sells a single product for $50. Variable costs are 60% of the selling price, and the company has fixed costs that amount to $400,000. Current sales total 16,000 units.
-Each unit that Narchie sells will:
A) increase profit by $20.
B) increase profit by $30.
C) increase profit by $50.
D) increase profit by some other amount.
E) decrease profit by $5.

Question

Quizplus · Accepted Answer

The variable cost per unit is 60% of $50, which is $30. Therefore, each unit sold at $50 minus the variable cost of $30 results in a contribution margin of $20 towards covering fixed costs and profit.

Use the Following Information to Answer the Following Questions