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Chris M.
Chris M., M.S.W. Social Work
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How do I solve the following Fixed costs are $20,570. At

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How do I solve the following: Fixed costs are $20,570. At the break-even point, variable costs are $1.63 per unit and the sales price is $3.50 per unit. What is the contribution margin per unit?

Hello,

 

Fixed costs are $20,570. At the break-even point, variable costs are $1.63 per unit and the sales price is $3.50 per unit. What is the contribution margin per unit.

Contribution margin per unit = Sales price per unit - variable cost per unit

= $3.50 - $1.63

= $ 1.87

 

Hope this helps!

Customer: replied 6 years ago.
Somehow I copied and pasted the wrong question. I already knew that and am happy I figured it out the same way you did. I am sorry,

But this is the correct question. I cannot figure out how to get the selling price per unit.

At Caleb’s Tights, the break-even point is 2,000 units. If fixed costs total $300,000 and variable costs are $30 per unit, what is the selling price per unit?

Tell me if I have to pay you more.
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Customer: replied 6 years ago.
I understand what you just said. My choices however are:

A. $5
B. $210
C. $150
D. $180

So how do I resolve that?

 

Please review the answer. The correct answer is D. $180

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