Pacos Bikes sells 120 bicycles each month for 400 per unit V

Paco’s Bikes sells 120 bicycles each month for $400 per unit. Variable cost per unit is $160 and fixed costs total $4,800 per month. What is the contribution margin per unit?

Solution

Contribution margin per unit = Sale price per unit-Variable cost per unit

                                          = 400-160

Contribution margin per unit = 240 per unit