Question

a company product sells for 170 and has variable cost of 50 associated with the product what is its contribution margin per unit ?​

Answer 1

Contribution margin per unit = 120 per unit

Step-by-step explanation:

Given:

Sales price of a unit = 170

Variable cost per unit = 50

Find:

Contribution margin per unit

Computation:

Contribution margin per unit = Sales price of a unit - Variable cost per unit

Contribution margin per unit = 170 - 50

Contribution margin per unit = 120 per unit

Contribution margin ratio = [Contribution margin per unit / Sales price of a unit]100

Contribution margin ratio = [120 / 170]100

Contribution margin ratio = [0.7058]100

Contribution margin ratio = 70.58% (Approx.)