Question

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

Answer 1

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