Question

At its $34 selling price, Atlantic Company has sales of $34,000, variable manufacturing costs of $5,000, fixed manufacturing costs of $2,000, variable selling and administrative costs of $5,000 and fixed selling and administrative costs of $2,000. What is the company's contribution margin per unit?

Answer 1

Step-1:Calculation of number of units sold
	Total Sales					$       34,000
	/ Selling price per unit					$ 34
	Number of units sold					1,000
Step-2:Calculation of variable cost per unit
	Variable Manufacturing cost					$         5,000
	variable selling and administrative costs					$         5,000
	Total variable costs					$       10,000
	/ Number of units sold					1,000
	Variable cost per unit					$         10.00
Step-3:Calculation of contribution margin per unit
	Selling Price per unit					$ 34
	Less Variable cost per unit					$ 10
	Contribution margin per unit					$ 24