The contribution margin per unit is calculated using variable costing by subtracting the variable costs per unit from the sales price per unit.

Step 1: Breakdown of variable costs per unit

1. Variable marketing and administrative costs: $50 per unit
2. Variable manufacturing overhead: $80 per unit
3. Direct labor: $100 per unit
4. Direct materials: $200 per unit

Total variable costs per unit: $50 + 80 + 100 + 200 = 430 \, \text{per unit}$

Step 2: Contribution margin per unit formula

$\text{Contribution margin per unit} = \text{Sales price per unit} - \text{Total variable costs per unit}$ $\text{Contribution margin per unit} = 800 - 430 = 370$

Final Answer:

The contribution margin per unit is $370.

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Related Questions:

1. What is the total contribution margin for all 2,000 units?
2. How do fixed costs affect the break-even analysis in this case?
3. What is the break-even sales volume in units?
4. What is the impact on contribution margin if direct material costs increase by $10 per unit?
5. How would a $50 increase in the sales price affect the contribution margin?

Tip:

Understanding the contribution margin is key to evaluating profitability and decision-making, as it highlights how much revenue contributes to covering fixed costs and generating profit.