Paper 1 · break-even analysis
Mary sells onions at 1 per pocket. Calculate the contribution per pocket, in dollars.
Model answer
4
Also accepted: $4, 4.00, $4.00
Explanation: Contribution per unit is selling price less variable cost per unit, so 5 less 1 gives 4. It is the amount each pocket sold contributes first towards covering fixed costs, and then, once those are covered, towards profit.
Derived from ZIMSEC Business Enterprise Skills Paper 1, Nov 2018, Q9