Asked by
Prabhnoor Bagri
on Nov 19, 2024Verified
To estimate what the profit will be at various levels of sales volume, multiply the number of units to be sold above or below the break-even point by the unit contribution margin.
Unit Contribution Margin
The difference between the selling price of a unit and its variable costs, indicating how much each unit contributes to covering fixed costs and generating profit.
Sales Volume
The total number of units sold within a specific period, often used as an indicator of business performance.
- Apply the concept of unit contribution margin to estimate profits at various sales volumes.
Verified Answer
VM
Learning Objectives
- Apply the concept of unit contribution margin to estimate profits at various sales volumes.