Discussion
Contribution per unit is the selling price less the
Answer: B
Correct answer: variable cost per unit
Contribution is what each unit sold contributes towards the fixed costs and, once those are covered, towards profit:
\[ c = p - v \]It is not profit per unit, since no fixed cost has yet been deducted. Every break-even calculation rests on this quantity, and the whole method can be summarised as asking how many contributions are needed to pay for the fixed costs.
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