Hot Company, a Producer of Salsa, Has the Following Information

question 96

Multiple Choice

Hot Company, a producer of salsa, has the following information: $$\begin{array} { l r } \text { Income tax rate } & 30 \% \\\text { Selling price per unit } & \$ 8.00 \\\text { Variable cost per unit } & \$ 3.00 \\\text { Total fixed costs } & \$ 90,000.00\end{array}$$ The contribution margin per unit is _____.

• A)$2.00
• B)$3.00
• C)$5.00
• D)$8.00

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Definitions:

Depreciation Adjustment

A financial accounting process that allocates the cost of a tangible asset over its useful life to account for the decline in its value.

Assets

Resources owned by a company deemed to have economic value and are expected to provide future benefits to the operations of the company.

Expenses

Costs that are incurred in the process of generating revenue.