Question

Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales $ 20,000 Variable expenses 12,000 Contribution margin 8,000 Fixed expenses 6,000 Net operating income $ 2,000 Required: 1. What is the contribution margin per unit

Answer 1

Unitary contribution margin= $8

Step-by-step explanation:

Giving the following information:

Sales $ 20,000

Variable expenses 12,000

Contribution margin 8,000

To calculate the unitary contribution margin, we need to use the following formula:

Unitary contribution margin= total contribution margin / total units

Unitary contribution margin= 8,000 / 1,000

Unitary contribution margin= $8