Kelly Company sells its only product for $9 per unit, variable production costs are $3 per unit,

Question:

Kelly Company sells its only product for $9 per unit, variable production costs are $3 per unit, and selling and administrative costs are $1.50 per unit. Fixed costs for 10,000 units are $5,000. The contribution margin is:

A) $6 per unit

B) $4.50 per unit

C) $5.50 per unit

D) $4 per unit

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...