ENTREPRENEURIAL PLANNING
FINANCIAL PLANNING AND ANALYSIS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which is the correct formula for contribution per unit?
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Selling price-variable cost
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Fixed cost / contribution per unit
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break even output-units sold
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None of the above
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Explanation:
Detailed explanation-1: -The contribution margin ratio per unit formula is = Selling price per unit – Variable cost per unit.
Detailed explanation-2: -Contribution per unit is the residual profit left on the sale of one unit, after all variable expenses have been subtracted from the related revenue. This information is useful for determining the minimum possible price at which to sell a product.
Detailed explanation-3: -Calculate the variable cost per unit. Every product costs money to create, and these costs can be either fixed or variable costs. Determine your net sales. Find the contribution margin per unit. Add the variable cost per unit to the contribution margin per unit. 24-Jun-2022
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