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Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales $ 20,000 Variable expenses 13,000 Contribution margin 7,000 Fixed expenses 3,780 Net operating income $ 3,220 Required: 1. What is the contribution margin per unit

Respuesta :

Answer:

$7

Explanation:

Given: Sales volume= 1000 units.

           Sales= $20000.

           Variable expense= $13000.

            Contribution margin= $7000.

            Fixed expense= $3780

            Net operating income= $3220.

Now, finding the contribution margin per unit.

Formula; Contribution margin per unit= [tex]\frac{(sales- variable\ expense)}{Number\ of\ sales\ units}[/tex]

⇒ Contribution margin per unit=  [tex]\frac{(20000-13000)}{1000}[/tex]

⇒ Contribution margin per unit= [tex]\frac{7000}{1000}[/tex]

∴ Contribution margin per unit= [tex]\$ 7[/tex]

Hence, $7 is the contribution margin per unit.

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