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

Variable cost per unit = $1.75

Explanation:

Break even in dollars is calculated using Fixed Expense/ Contribution Margin Ratio

therefore

Contribution margin Ratio =Fixed expenses/Break even in dollar

= $18,000 / $24,000

= 0.75

Contribution Margin  =Sales × Contribution Margin Ratio

$7 x 0.75=$5.25  

Variable cost per unit = Sales - Contribution margin

=$7.00 - $5.25

Variable cost per unit = $1.75

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