Question

Hudson Co. reports the contribution margin income statement for 2015. Contribution Margin Income Statement For Year Ended December 31, 2015 Sales (9,600 units at $225 each) $2,160,000 Variable costs (9,600 units at $180 each) 1,728,000 Contribution margin $432,000 Fixed costs 324,000 Pretax income $108,000 If the company raises its selling price to $240 per unit. Compute Hudson Co.'s contribution margin per unit.

Answer 1

Answer:

$60 per unit

Explanation:

The computation of the contribution margin per unit is shown below:

Contribution margin per unit = Selling price per unit - Variable expense per unit

= $240 per unit - $180 per unit

= $60 per unit

It shows a difference between selling price per unit and the variable cost per unit

All other information which is given is not relevant. Hence, ignored it