Asked by Shayal Shiwani on May 27, 2024
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In cost-volume-profit analysis,the unit contribution margin is:
A) Sales price per unit less cost of goods sold per unit.
B) Sales price per unit less unit fixed cost per unit.
C) Sales price per unit less total variable cost per unit.
D) Sales price per unit less unit total cost per unit.
E) The same as the contribution margin ratio.
Cost-Volume-Profit Analysis
Cost-Volume-Profit Analysis is a managerial accounting technique that analyzes how changes in costs and volume affect a company's operating income and net income.
Unit Contribution Margin
The amount each unit sold contributes towards fixed costs and profits, calculated by subtracting variable costs per unit from the selling price per unit.
Variable Cost
Expenses that vary directly with the level of production or sales, such as materials and labor costs.
- Gain an understanding of the contribution margin ratio and ascertain its role in break-even calculations.
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Learning Objectives
- Gain an understanding of the contribution margin ratio and ascertain its role in break-even calculations.
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