Question

A project has expected sales of 54,000 units, ±5 percent, variable cost per unit of $87, ±2 percent, fixed costs of $287,000, ±1 percent, and a sales price per unit of $219, ±2 percent. The depreciation expense is $47,000 and the tax rate is 23 percent. What is the contribution margin per unit for a sensitivity analysis using a variable cost per unit of $85

Answer 1

Answer:

$134

Explanation:

The computation of contribution margin per unit for a sensitivity analysis using a variable cost per unit is shown below:

Contribution margin per unit = Selling price per unit - Variable expense per unit

= $219 - $85

= $134

For determining the contribution margin per unit, we subtract the variable cost per unit from the selling price per unit so that the accurate per unit can value can come

Answer 2

The contribution margin per unit for a sensitivity analysis using a variable cost per unit of $85  is $134

What is contribution margin?

The contribution margin is an evaluation of a former sales period. Entrepreneurs use this procedure to determine whether they made a profit or loss during the period.

The computation of contribution margin per unit for a sensitivity analysis using a variable cost per unit is computed below:

Contribution margin per unit

= Selling price per unit - Variable expense per unit

= $219 - $85

= $134

Hence, the contribution margin per unit for a sensitivity analysis using a variable cost per unit of $85  is $134

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