Question

The selling price of a particular product is $7 per unit fixed costs total at 22,400 and the break even sales in dollars is $28,000 what would be the variable expense per unit

Answer 1

Answer:

$6.2 per uni

Explanation:

The selling price is $7.

break-even sales in dollars is $28,000,

Variable expense per unit will be?

using the contribution margin method:  

break-even point = fixed cost/ contribution margin per unit

In this case.

$28,000 = 22,400/contribution margin per unit

contribution margin per unit = 22400/28000

contribution margin per unit = $0.8

contribution margin = sales price -variable expenses

therefore,

$0.8= 7- variable expenses

variable expense = $7- $0.8

variable expense is $6.2 per unit