Question

Florsheim Company, a producer of shoes, has the following information: Income tax rate 21% Selling price per unit $120.00 Variable cost per unit $80.00 Total fixed costs $500,000.00 The contribution margin per unit is ________. A) $0 B) $40.00 C) $80.00 D) $120.00

Answer 1

Unitary contribution margin= $40

Step-by-step explanation:

Giving the following information:

Selling price per unit $120.00

Variable cost per unit $80.00

The contribution margin per unit is calculated using the following formula:

Unitary contribution margin= selling price - unitary variable cost

Unitary contribution margin= 120 - 80

Unitary contribution margin= $40