Contribution Margin Can Be Expressed on a Per Unit Basis

question 102

Multiple Choice

Contribution margin can be expressed on a per unit basis as

• A) the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold.
• B) the sum of the expenses of the firm that change with the quantity of a product that is produced and sold.
• C) the difference between unit selling price and unit variable cost.
• D) the average amount of money received for selling one unit of a product or simply the price of that unit.
• E) the change in total cost that results from producing and marketing one additional unit of a product.

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Definitions:

Budgeted Raw Material Purchases

The estimated amount a company plans to spend on raw materials for production over a specific period.

Estimated Direct Labor Cost

The projected cost of labor directly involved in the manufacturing of goods or provision of services, excluding indirect labor costs.

Expected Cash Collections

Projected amounts of money a business anticipates receiving from its customers or clients over a specific period.

Estimated Direct Labor Cost

The anticipated cost of labor directly associated with the production of goods or services, typically estimated before production begins.