What term describes the difference between the selling price of a product and its variable cost per unit?

Multiple choice question for Cost Volume Profit Analysis. Select an option, then review the explanation below.

Explanation

The contribution margin per unit represents the amount remaining after subtracting the variable cost per unit from the selling price. This margin contributes towards covering fixed costs and generating profit.

Practice related questions from the same subject.

1.What is obtained when the fixed costs are divided by the contribution margin per unit?
2.Given a contribution margin ratio of 30% and a selling price of $5,000, what is the contribution margin amount for each unit?
3.Given a contribution margin of $13,000 and total variable costs amounting to $7,000, what is the total revenue?
4.Given a selling price of $5000 and a contribution margin per unit of $1000, what is the contribution margin percentage?
5.Given a revenue of $15,000, variable costs totaling $5,000, and fixed costs amounting to $2,000, what is the operating income?

What term describes the difference between the selling price of a product and its variable cost per unit?

Explanation

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