What is the contribution margin per unit, Accounting Basics

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What is the contribution margin per unit

XYZ Company is a retailer of widgets. XYZ pays $4.10 for each widget and sells them for $8.50. Monthly fixed costs are $31,240. The widget cost is the only variable cost.

a.	What is the contribution margin per unit?

Contribution margin

$per unit

b.	What is the break-even point in units?

Break-even point

units

c.	How many units will XYZ need to sell to earn target profit of $29,480?

Total number of units

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Accounting Basics: What is the contribution margin per unit

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Accounting Basics: What is the contribution margin per unit

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