Question

Data for Hermann Corporation are shown below:

Fixed expenses: $72,000 per month
Variable cost per unit: $12
Selling price per unit: $18
What is the contribution margin per unit?
a. $6
b. $12
c. $18
d. $24

Answer 1

The correct answer is option a. The contribution margin per unit for Hermann Corporation is calculated by subtracting the variable cost per unit ($12) from the selling price per unit ($18), which results in $6.

Step-by-step explanation:

The student's question involves the calculation of the contribution margin per unit for Hermann Corporation. The contribution margin per unit can be calculated by subtracting the variable cost per unit from the selling price per unit.

In this case, the selling price per unit is $18 and the variable cost per unit is $12. Therefore, the contribution margin per unit is:

$18 (selling price) - $12 (variable cost) = $6

So, the correct answer for the contribution margin per unit is a. $6.