Company sells each bag of food for $10. The Variable Expense per bag of food is $6. Fixed Expenses per month total $300. Company currently sells 100 units of dog food. If Company were to increase its variable cost per unit by $1, what would be the new Contribution Margin per unit for Company ?

Company currently makes and sells one type and size of dog food, a 16 ounce bag of all-natural freeze-dried chicken. Company sells each bag of food for $10. The Variable Expense per bag of food is $6. Fixed Expenses per month total $300. Company currently sells 100 units of dog food.

If TDFI were to increase its variable cost per unit by $1, what would be the new Contribution Margin per unit for Company ?

$7

$3

$5

$300