Asked by Kiasha Trammell on Jul 03, 2024
Verified
The contribution per unit is
A) price minus total costs.
B) price minus total variable cost.
C) price minus variable cost per unit.
D) total revenue minus total cost.
E) break-even quantity divided by total fixed costs.
Contribution Per Unit
The amount of money left from the sale of one unit after deducting the variable costs associated with the product's production and sale.
Variable Cost Per Unit
The cost that varies with the level of output or production, such as materials and labor, on a per-unit basis.
Total Variable Cost
The sum of all costs that vary with the level of output produced, such as materials and labor.
- Acquire knowledge of break-even analysis principles and their application in business decision processes.
Verified Answer
SW
shania wilsonJul 09, 2024
Final Answer :
C
Explanation :
The contribution per unit is the amount that each unit sold contributes towards covering the fixed costs and generating profit. It is calculated by subtracting the variable cost per unit from the selling price per unit. Therefore, option C (price minus variable cost per unit) is the correct choice.
Learning Objectives
- Acquire knowledge of break-even analysis principles and their application in business decision processes.