The selling price of a particular product is $7

Accounting Mar 02, 2021

The selling price of a particular product is $7.00 per unit, fixed costs total $18,000, and the breakeven sales in dollars is $24,000. What would be the variable expense per unit?

A) $2.33

B) $5.25

C) $1.75

D) $12.25

Expert Solution

Answer: C

Explanation: C)

Fixed Expenses $18,000 / Contribution Margin Ratio (x) = $24,000 BE Sales

X = 75%

Sales $7 × 75% = $5.25 Contribution Margin

Sales $7

Less Contribution Margin 5.25

= Variable expense $1.75

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