Question

Green Manufacturing Company produces a product that has a variable cost of $30 per unit. Fixed costs amount to $240,000. The selling price of the product is $36. The contribution margin per unit is:

Answer 1

The contribution margin per unit is $6.

Step-by-step explanation:

Contribution margin is calculated by deducting all variable costs from the price of the product. It is used to calculate the products direct contribution in the earnings.

Price of product = $36 per unit

Cost of product = $30 per unit

Contribution margin = Price - cost

Contribution margin = $36 - $30

Contribution margin = $6 per unit