Question

The selling price of a unit is $21.2 and the variable product cost per unit is...

The selling price of a unit is $21.2 and the variable product cost per unit is $15.1. In addition, a sales commission of 5% is paid on each sale. If the variable product cost per unit increases by 1%, what will be the new contribution margin per unit?

$4.90

$5.20

$4.89

$6.10

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Answer #1
New contribution margin per unit = Selling price per unit - Sales commission per unit - Variable cost per unit
New contribution margin per unit = (21.20-(21.20*5%)-(15.10*101%))
New contribution margin per unit = (21.20-1.06-15.2510)
New contribution margin per unit = $ 4.8890
New contribution margin per unit = $ 4.89/.
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