The records of the Dodge Company show the following results

The records of the Dodge Company show the following results for the most recent year:

Sales (20,000 units) $320,000

Variable expenses 240,000

Net operating income 32,000

Given this data, compute contribution margin per unit

Solution

Contribution margin per unit = ($320,000 - $240,000) / 20,000 units = $4 per unit