A Company Has a Unit Contribution Margin of $120 and a Contribution

question 32

Multiple Choice

A company has a unit contribution margin of $120 and a contribution margin ratio of 40%. What is the unit selling price?

• A) $200
• B) $300
• C) $48
• D) Cannot be determined.

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Definitions:

Buyers

Individuals or entities that purchase goods or services for personal use or for resale.

Sellers

Individuals or entities engaged in the act of selling or providing goods and services to consumers or other businesses.

Rationing Function

The ability of market prices to allocate scarce goods and services to those who are willing and able to pay for them.