If the selling price is $5000, variable manufacturing cost per unit is $1500 and variable marketing cost per unit is $500, then contribution margin per unit will be __________?
Correct answer: B. $3,000
- A. $7,000
- B. $3,000
- C. $4,000
- D. $5,000
Explanation
Contribution margin per unit equals selling price less all variable costs: $5,000 − $1,500 − $500 = $3,000. Fixed costs are not deducted in this calculation.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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