1. The contribution margin per unit on the first 16,000 units is:
Per Unit
Sales price ... $3.00
Less variable expenses... 1.25
Contribution margin... $1.75
The contribution margin per unit on anything over 16,000 units is:
Less variable expenses... 1.40
Contribution margin... $1.60
Thus, for the first 16,000 units sold, the total amount of contribution
margin generated would be:
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