Question

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:

Answer 1

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 $