How does this expert come up with $12 in variable costs? It seems to me that -$50K in profit when producing 10,000 units means that revenue was $600K, costs were -$650K, fixed costs were $250K, which means that remaining variable costs are 400K. 400K/10000 units = $40 in variable costs per unit (not $12). Thus contribution margin is $60 - $40 = $20.

Answer rating: 100% (QA)

Youre absolutely right There seems to be an error in the interpretation of the cost data presented i... View the full answer