Question

Kelsay Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. Sales (9,000 units) $ 540,000 Variable expenses 405,000 Contribution margin 135,000 Fixed expenses 130,500 Net operating income $ 4,500 The contribution margin per unit is closest to:

Answer 1

Answer:

the contribution margin per unit is $15 per unit

Explanation:

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

Contribution margin per unit is

= Selling price per unit - variable cost per unit

= ($540,000 ÷ 9,000 units) - ($405,000 ÷ 9,000 units)

= $60 - $45

= $15 per unit

Hence, the contribution margin per unit is $15 per unit