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-   -   Contribution margin per unit. (https://www.askmehelpdesk.com/showthread.php?t=707368)

  • Oct 7, 2012, 01:11 AM
    victorlyh1990
    Contribution margin per unit.
    Based on the information provided below, calculate the contribution margin per unit.

    Units sold 2,000
    Selling price per unit $5.00
    Direct labour costs $3,000
    Raw materials costs $2,000
    Machinery cost $2,500
  • Oct 8, 2012, 10:47 AM
    ebaines
    Contribution margin is revenue minus variable costs of manufacture (costs that are incurred with every unit sold). It does not include overhead costs that you incur regardless of how many units you make - such as capital expenses and depreciation, real estate taxes, R&D expenses, etc. So from the list of expenses you provided, can you tell us which ought to be included in the contribution analysis? Contribution margin per unit is the contribution divided by number of units sold.

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