At its $60 selling price,Atlantic Company has sales of $15,000,variable manufacturing costs of $4,000,fixed manufacturing costs of $1,000,variable selling and administrative costs of $2,000,and fixed selling and administrative costs of $1,000.What is the company's contribution margin per unit?
A) $26
B) $28
C) $44
D) $36

Question

Quizplus · Accepted Answer

The contribution margin per unit is calculated by subtracting the variable costs per unit from the selling price per unit. First, calculate the total variable costs: $4,000 (variable manufacturing costs) + $2,000 (variable selling and administrative costs) = $6,000. Then, find the number of units sold: $15,000 / $60 = 250 units. The variable cost per unit is $6,000 / 250 = $24. Finally, subtract the variable cost per unit from the selling price per unit: $60 - $24 = $36.

At Its $60 Selling Price,Atlantic Company Has Sales of $15,000,variable