Question

or a manufacturing company, selling price for an item is $497.00 per Unit, Variable cost is $235.00 per Unit, rent is $7,161.00 per month and insurance is $3000 per month. What is the contribution margin?

Answer 1

The contribution margin per unit can be calculated using the formula:

\[
\text{Contribution Margin} = \text{Selling Price} - \text{Variable Cost}
\]

Given:
- Selling Price per Unit = $497.00
- Variable Cost per Unit = $235.00

Now, plug in the values:

\[
\text{Contribution Margin} = 497.00 - 235.00 = 262.00
\]

So, the contribution margin per unit is **$262.00**.