In contribution margin analysis,the unit price or unit cost factor is computed as:
A) the difference between the actual unit price or unit cost and the planned unit price or cost,multiplied by the planned quantity sold
B) the difference between the actual unit price or unit cost and the planned unit price or cost,multiplied by the actual quantity sold
C) the difference between the actual quantity sold and the planned quantity sold,multiplied by the planned unit sales price or unit cost
D) the difference between the actual quantity sold and the planned quantity sold,multiplied by the actual unit sales price or unit cost

Question

Quizplus · Accepted Answer

The unit price or unit cost factor in contribution margin analysis measures the impact of actual prices or costs compared to planned prices or costs on the overall contribution margin. It is computed by multiplying the difference between the actual unit price/cost and planned unit price/cost by the actual quantity sold. This calculation helps to identify the extent of the deviation from the planned contribution margin and assists in determining the causes of the variance. Option B is the correct answer as it matches this definition. Options A, C, and D do not accurately describe the calculation for the unit price or unit cost factor.

In Contribution Margin Analysis,the Unit Price or Unit Cost Factor