A Proposed Project Has Fixed Costs of $9,800,depreciation Expense of $2,550,and

question 64

Multiple Choice

A proposed project has fixed costs of $9,800,depreciation expense of $2,550,and a sales quantity of 2,100 units.The total variable costs are $5,607.What is the contribution margin per unit if the projected level of sales is the accounting break-even point?

• A)$3.28
• B)$4.07
• C)$5.88
• D)$6.16
• E)$7.11

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Definitions:

Unit Selling Price

The price at which a single unit of a product is offered for sale to customers.

Unit Variable Costs

The cost associated with producing one additional unit of product, including materials, labor, and other variable expenses.

Break-even Point

The financial state in which total costs and total revenues are equal, meaning no net loss or gain is incurred by the business.

Variable Costs

Costs that change directly and proportionally with the level of production or business activity, such as materials and labor.