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12 May, 12:34

If the selling price is $22 per unit, what is the contribution margin per unit sold? (round your answer to 2 decimal places.)

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  1. 12 May, 14:30
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    The computation follows:

    1. Solve first for the variable cost per unit.

    Direct materials $ 6.00

    Direct labor $ 3.50

    Variable manufacturing overhead $ 1.50

    Sales commissions $ 1.00

    Variable administrative expense $ 0.50

    = $12.50 variable cost per unit

    2. Then deduct the selling price to the variable cost per unit, to get the contribution margin.

    22 - 12.50 = $9.50 CM per unit
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