# How to calculate the contribution margin per unit?

#### Understand the Problem

The question is asking how to calculate the contribution margin per unit, which involves understanding the revenue generated from each unit sold after deducting variable costs. This calculation helps in assessing profitability.

Contribution Margin per Unit = Selling Price per Unit - Variable Cost per Unit

The contribution margin per unit is calculated by subtracting the variable cost per unit from the selling price per unit.

#### Steps to Solve

1. Identify the selling price per unit

Determine the amount for which one unit of the product is sold. Let's denote this as $P$.

2. Identify the variable cost per unit

Determine the variable cost associated with producing one unit. Let's denote this as $V$.

3. Apply the contribution margin formula

The contribution margin per unit is calculated as:

$$\text{Contribution Margin per Unit} = P - V$$

Subtract the variable cost per unit from the selling price per unit.

The contribution margin per unit is calculated by subtracting the variable cost per unit from the selling price per unit.