Response:
unit variable contribution margin = $2.52
Clarification:
Initially, we will compute the total variable cost:
Total variable cost = Variable manufacturing costs + Variable selling and administrative costs
Total variable cost = 560,000 + 260,000
Total variable cost = $820,000
Then, determine the unit variable cost and selling price:
unit variable cost = 820,000 / 520,000= $1.58
Selling price= 2,132,000 / 520,000= $4.1
Finally, calculate the unit contribution margin:
unit contribution margin = selling price - unit variable cost
unit contribution margin = 4.1 - 1.58
unit contribution margin = $2.52
