Antoine rents rooms in his hotel for an average of $100 per night. The variable cost per rented room is $20, to cover maid service and utilities. His fixed costs are $100,000 and his profit last year was $20,000. For Antoine, the contribution per unit is

A) $100.
B) $80.
C) $800.
D) $1,000.
E) $40

Question

Kasandra Lusignan · Accepted Answer

Final Answer : B, Explanation :  - Contribution per unit = Price per unit - Variable cost per unit- Price per unit = $100 (given)- Variable cost per unit = $20 (given)- Contribution per unit = $100 - $20 = $80- Total contribution = (Price per unit - Variable cost per unit) x Number of units sold- Total contribution = $80 x X (where X is the number of rooms rented)- Total contribution last year = Profit + Fixed costs- $80X = $20,000 + $100,000- $80X = $120,000- X = 1500 rooms- Therefore, the contribution per unit is $80.

Antoine rents rooms in his hotel for an average of $100 per night. The variable cost per rented room is $20, to cover maid service and utilities. His fixed costs are $100,000 and his profit last year was $20,000. For Antoine, the contribution per unit is

A) $100.
B) $80.
C) $800.
D) $1,000.
E) $40

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Learning Objectives

Related questions

Antoine rents rooms in his hotel for an average of $100 per night. The variable cost per rented room is $20, to cover maid service and utilities. His fixed costs are $100,000 and his profit last year was $20,000. For Antoine, the contribution per unit isA) $100.B) $80.C) $800.D) $1,000.E) $40

Definitions

Learning Objectives

Learning Objectives

Related questions

Antoine rents rooms in his hotel for an average of $100 per night. The variable cost per rented room is $20, to cover maid service and utilities. His fixed costs are $100,000 and his profit last year was $20,000. For Antoine, the contribution per unit is

A) $100.
B) $80.
C) $800.
D) $1,000.
E) $40