A Business Sells a Product with Variable Costs Per Unit

question 35

Multiple Choice

A business sells a product with variable costs per unit of $30.Fixed costs are $10,000 per period.The selling price per unit is $100.Assuming 1,000 units are sold in a period,what is the contribution margin for the period?

• A) $30,000.
• B) $60,000.
• C) $70,000.
• D) $100,000.

---

Definitions:

Depreciation Expense

The methodical distribution of a physical asset's cost throughout its lifespan, accounting for depreciation or becoming outdated.

Operating Cash Flow

The cash generated from the normal operating activities of a business, reflecting its ability to generate sufficient cash to fund its operations.

Variable Cost

Expenditures that fluctuate based on the volume of goods or services provided by a business.

Cash Break-Even

The point at which a company's cash inflows match its cash outflows, indicating no net gain or loss.