A division sold 200000 calculators during 2017: Sales $ 2 , 000 , 000 Variable costs: Materials $ 380 , 000 Order processing 150 , 000 Billing labor 110 , 000 Selling expenses 60 , 000 Total variable costs 700 , 000 Fixed costs 1 , 000 , 000 \begin{array}{llr} ext { Sales } & & \$2,000,000\ ext { Variable costs: } & \ ext {Materials } & \$380,000\ ext { Order processing} & 150,000\ ext { Billing labor} & 110,000\ ext { Selling expenses} & 60,000\ ext { Total variable costs} & & 700,000\ ext { Fixed costs } & & 1,000,000\\end{array} Sales Variable costs: Materials Order processing Billing labor Selling expenses Total variable costs Fixed costs $380 , 000 150 , 000 110 , 000 60 , 000 $2 , 000 , 000 700 , 000 1 , 000 , 000 How much is the unit contribution margin?A) $1.00B) $3.50C) $8.50D) $6.50

Question

A division sold 200000 calculators during 2017:    Sales  $ 2 , 000 , 000  Variable costs:  Materials  $ 380 , 000  Order processing 150 , 000  Billing labor 110 , 000  Selling expenses 60 , 000  Total variable costs 700 , 000  Fixed costs  1 , 000 , 000 \begin{array}{llr}  	ext { Sales }  & & \$2,000,000\ 	ext { Variable costs: }  & \ 	ext {Materials  }  & \$380,000\ 	ext {  Order processing}  & 150,000\ 	ext {  Billing labor}  & 110,000\ 	ext {  Selling expenses}  & 60,000\	ext {  Total variable costs}  & & 700,000\ 	ext { Fixed costs }  & & 1,000,000\\end{array}  Sales   Variable costs:  Materials   Order processing  Billing labor  Selling expenses  Total variable costs  Fixed costs  ​ $380 , 000 150 , 000 110 , 000 60 , 000 ​ $2 , 000 , 000 700 , 000 1 , 000 , 000 ​ How much is the unit contribution margin?A)  $1.00B)  $3.50C)  $8.50D)  $6.50

Alfredo Blank · Accepted Answer

Final Answer : D, Explanation :  The unit contribution margin is calculated as (Sales - Variable Costs) / Number of Units. Here, it's ($2,000,000 - $700,000) / 200,000 = $6.50 per unit.

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