Goldfarb Company manufactures and sells toasters. Each toaster sells for $22.95 and the variable cost per unit is $15.85. Goldfarb's total fixed costs are $24,200, and budgeted sales are 7,200 units. What is the contribution margin per unit

$7.10

Explanation:

The Contribution margin of a good refers to the amount left of the sales after the variable costs have been removed from it. It is useful in calculating the breakeven point as it can divide the fixed costs to find out the number of units needed to breakeven.

It is therefore calculated as:

= Sales - Variable cost

= 22.95 - 15.85

= $7.10

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