A Company's Product Sells at $12 Per Unit and Has

question 28

Multiple Choice

A company's product sells at $12 per unit and has a $5 per unit variable cost. The company's total fixed costs are $98,000.The contribution margin per unit is:

• A) $5.00.
• B) $7.00.
• C) $8.17.
• D) $12.00.
• E) $17.00.

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Definitions:

Consumption

The use of goods and services by households. It is the largest component of aggregate demand in an economy.

Underground Economy

Economic activities that occur outside of government regulation and taxation, including both illegal activities and unreported income from legal work.

Intermediate Goods

Products used in the production process to make other goods, not including raw materials.

Final Goods

Products that have completed the manufacturing process and are ready for use by consumers or to be sold as finished goods.