DJ Studios Is Considering Opening a New Location

Multiple Choice

DJ Studios is considering opening a new location. This location is estimated to bring in sales of $398,000 a year with total variable costs of $62,000, total fixed costs of $274,500, and estimated unit sales of 1,200. The depreciation expense is $18,900 a year. What is the contribution margin per unit?

A) $103
B) $117
C) $280
D) $284
E) $291