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:

Account Category

A classification within accounting used to group similar types of accounts, such as assets, liabilities, equity, revenue, and expenses.

Accounts Receivable Subsidiary Ledger

is a detailed ledger showing individual transactions and balances for customers who owe money to the business, supplementing the general ledger.

Control Account

A general ledger account that summarizes and controls the total amounts recorded in subsidiary ledgers.

Cash Sales

Transactions where payment is made in cash at the time of purchase.