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What is the contribution margin per unit if the selling price is $80 and variabl

Practice Questions

Q1
What is the contribution margin per unit if the selling price is $80 and variable costs are $50?
  1. $30
  2. $50
  3. $80
  4. $20

Questions & Step-by-Step Solutions

What is the contribution margin per unit if the selling price is $80 and variable costs are $50?
  • Step 1: Identify the selling price. In this case, the selling price is $80.
  • Step 2: Identify the variable costs. Here, the variable costs are $50.
  • Step 3: Use the formula for contribution margin per unit, which is: Contribution Margin per unit = Selling Price - Variable Costs.
  • Step 4: Substitute the values into the formula: Contribution Margin per unit = $80 - $50.
  • Step 5: Calculate the result: $80 - $50 = $30.
  • Step 6: The contribution margin per unit is $30.
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