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Fill in the Blank QuestionFill in the blank question.RST Company produces a product that has a variable cost of $6 per unit. The company's fixed costs are $30,000. The product sells for $10 per unit. RST desires to earn a profit of $20,000. The contribution margin per unit is $.

Question

Fill in the Blank QuestionFill in the blank question.RST Company produces a product that has a variable cost of 6perunit.Thecompanysfixedcostsare6 per unit. The company's fixed costs are 30,000. The product sells for 10perunit.RSTdesirestoearnaprofitof10 per unit. RST desires to earn a profit of 20,000. The contribution margin per unit is $.

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Solution

The contribution margin per unit is the selling price per unit minus the variable cost per unit. In this case, the selling price per unit is 10andthevariablecostperunitis10 and the variable cost per unit is 6.

So, the contribution margin per unit is 1010 - 6 = $4.

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