Chapter 21, Problem 1MCQ

To determine

Find the correct answer related to contribution margin per unit.

Answer to Problem 1MCQ

Option a

Explanation of Solution

Contribution Margin: It is defined as the difference between the sales and the variable cost.

Determine the contribution margin per unit.

Selling price per unit =$150 per unit

Variable cost per unit =$100 per unit

  $\begin{array}{c}\text{Contribution}\text{Margin}\text{per}\text{unit}\text{=}\left(\begin{array}{l}\text{Selling}\text{price}\\ \text{per}\text{unit}\end{array}\right)-\left(\begin{array}{l}\text{Variable}\text{cost}\\ \text{per}\text{unit}\end{array}\right)\\ \text{=\$150}\text{per}\text{unit}-\text{\$100}\text{per}\text{unit}\\ \text{=\$50}\text{per}\text{unit}\end{array}$

Conclusion

Therefore, the correct answer is option (a) $50.