The contribution margin per unit is useful because it provides a second way to calculate the contribution margin.

Question

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The contribution margin per unit is calculated by subtracting the variable cost per unit from the selling price per unit. It is useful because it provides a different way to calculate the contribution margin, which is the amount that goes towards covering fixed costs and generating profits. By knowing the contribution margin per unit, a business can determine how many units it needs to sell in order to break even or reach its desired profit level.

The Contribution Margin Per Unit Is Useful Because It Provides