A Division Sold 280,000 Calculators During 2020 How Much Is the Contribution Margin Per Unit, Rounded to {Sales

question 77

Multiple Choice

A division sold 280,000 calculators during 2020: $\begin{array}{llcc} \text {Sales } &&\$5,600,000\\ \text {Variable costs: } &\\ \text { Materials} &\$1,400,000\\ \text {Order processing }& 280,000&\\ \text { Billing labour} &1,120,000\\ \text { Delivery costs} &840,000\\ \text {Selling expenses } &\underline{560,000}\\ \text { Total variable costs } &&4,200,000\\ \text { Fixed costs } &&750,000\\\end{array}$
How much is the contribution margin per unit, rounded to the nearest cent?

• A)$17.32
• B)$15.00
• C)$7.00
• D)$5.00

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Definitions:

Equilibrium Price

The market price at which the quantity of a good supplied equals the quantity demanded, leading to a stable market condition where there is no tendency for the price to change.

Game Theory

A branch of economics and mathematics that studies strategic interactions among rational decision-makers.

Strategic Situations

Scenarios in which individuals or organizations must make decisions that consider the actions and reactions of other participants.

Price-Fixing

An illegal agreement among competitors to set prices at a certain level, rather than allowing them to be determined naturally by market forces.