Question

The goldfarb company manufactures and sells toasters. each toaster sells for $24.65 and the variable cost per unit is $16.75. goldfarb's total fixed costs are $25,900, and budgeted sales are 8,900 units. what is the contribution margin per unit?

Answer 1

The contribution margin per unit for the Goldfarb company is calculated by subtracting the variable cost per unit ($16.75) from the selling price per unit ($24.65), resulting in a contribution margin of $7.90 per unit.

Step-by-step explanation:

The contribution margin per unit is calculated by subtracting the variable cost per unit from the selling price per unit. In the Goldfarb company example, each toaster sells for $24.65 and the variable cost per unit is $16.75. To find the contribution margin per unit, perform the following calculation:

Selling price per unit - Variable cost per unit = Contribution margin per unit

$24.65 - $16.75 = $7.90

Therefore, the contribution margin per unit for the Goldfarb company is $7.90.