Question

A division sold 370000 calculators during 2020: Sales $3700000 Variable costs: Materials$703000 Order processing277500 Billing labor203500 Selling expenses111000 Total variable costs 1295000 Fixed costs 1000000 How much is the unit contribution margin

Answer 1

$6.5 per unit

Step-by-step explanation:

Given the above information, we know that the formula to calculate unit contribution margin is

= Contribution margin / Total number of calculators sold

Given that;

Total number of calculators sold = 370,000

Sales = $3,700,000

Variable cost = $1,295,000

First, we need to calculate the contribution margin

= Sales - Variable cost

= $3,700,000 - $1,295,000

= $2,405,000

Therefore, the unit contribution margin

= $2,405,000 / 370,000

= $6.5 per unit.