Mountainburg Industries has developed two new products but has only enough plant capacity to introduce one product during the current year. The following data will assist management in deciding which product should be selected.
Mountainburg's fixed overhead includes rent and utilities, equipment depreciation, and supervisory salaries. Selling and administrative expenses are not allocated to individual products. The difference between the $100 estimated selling price for Mountainburg's Product W and its total manufacturing cost of $88 represents
A. Gross margin per unit.
B. Contribution margin per unit.
C. Variable cost per unit.
D. Operating profit per unit.
Answer: A
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