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If selling price is $20 per unit and variable costs are $14 per unit, the contribution margin is:Group of answer choices$1.43 per unit.$280.$6 per unit.$34 per unit.

Question

If selling price is 20perunitandvariablecostsare20 per unit and variable costs are 14 per unit, the contribution margin is:Group of answer choices1.43perunit.1.43 per unit.280.6perunit.6 per unit.34 per unit.

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Solution

The contribution margin is calculated by subtracting the variable cost per unit from the selling price per unit.

Here's how you can calculate it:

Step 1: Identify the selling price per unit. In this case, it's $20.

Step 2: Identify the variable cost per unit. In this case, it's $14.

Step 3: Subtract the variable cost per unit from the selling price per unit.

So, 20(Sellingpriceperunit)20 (Selling price per unit) - 14 (Variable cost per unit) = $6 per unit.

Therefore, the contribution margin is $6 per unit.

This problem has been solved

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