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Lina Company produces a product which sells for $40. Variable manufacturing costs are $18 per unit. Fixed manufacturing costs are $5 per unit based on the current level of activity, and fixed selling and
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40 votes
40 votes
Lina Company produces a product which sells for $40. Variable manufacturing costs are $18 per unit. Fixed manufacturing costs are $5 per unit based on the current level of activity, and fixed selling and administrative costs are $4 per unit. The contribution margin per unit is:

User Pranit Kothari
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1 Answer

23 votes
23 votes

Answer:

The answer is 22 $

Step-by-step explanation:

We calculate the contribution margin by following relation:

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

C = S - V

here S = 40$ and V = 18$

C = 40 - 18 = 22 $

User Sgt B
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