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31 August, 04:34

Required information [The following information applies to the questions displayed below.] Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost Per Unit Direct materials $ 6.30 Direct labor $ 3.80 Variable manufacturing overhead $ 1.50 Fixed manufacturing overhead $ 4.00 Fixed selling expense $ 3.30 Fixed administrative expense $ 2.00 Sales commissions $ 1.00 Variable administrative expense $ 0.50 13. If the selling price is $22.30 per unit, what is the contribution margin per unit? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

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  1. 31 August, 05:25
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    Contribution margin = $10,2

    Explanation:

    The formula to calculate the contribution margin is:

    CM = Price - variable costs

    First, we need to determine which cost are variable:

    Cost Per Unit Direct materials $ 6.30

    Direct labor $ 3.80

    Variable manufacturing overhead $1.50

    Variable administrative expense $ 0.50

    Total variable cost = $12.1

    Cm = $22.30 - $12.1 = $10,2
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