Question

The Creasy Company recently sold 2,500 units for $200 each; the company had total variable costs of $205,000 and total fixed costs of $15,000. What is the company's contribution margin per unit?

Answer 1

118$

Step-by-step explanation:

The contribution margin per unit can be calculated by subtracting the variable cost per unit from the selling price per unit.

Variable cost per unit = Total variable costs / Total units sold

Variable cost per unit = $205,000 / 2,500 units = $82

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

Contribution margin per unit = $200 - $82 = $118

Therefore, the Creasy Company's contribution margin per unit is $118.