Jane is planning to expand her business by taking on a new product. She can purchase...
Jane is planning to expand her business by taking on a new product. She can purchase the new product at a cost of $2 per unit. To market this new product, she would need to spend $1400 on advertising each month. She is not sure how she should price her product and is asking for your help. If she chooses a price of $14.5 per unit, what will be the contribution rate per unit?
Homework Answers
Contribution Rate per unit = Selling price - Variable Cost per
unit
= $14.5 - 2 = $12.50 per unit
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