A companys product sells at 12 contribution margin per unit

A company\'s product sells at $12. contribution margin per unit is: 12 per unit and has a $5.18 per unit variable cost The company\'s total fixed costs are $97,400 The

Solution

Solution: Contribution Margin per unit is $ 6.94 per unit. Working Notes: Contribution margin per unit = Selling Price per unit - Variable cost per unit =$12.12 - $5.18 =$6.94 Contribution margin is the part of selling price which contribute to fixed cost and profit of the company as variable cost is already recovered to calculate contribution margin. Please feel free to ask if anything about above solution in comment section of the question.