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4 May, 12:46

Pedregon Corporation has provided the following information: Cost per Unit Cost per PeriodDirect materials $6.35 Direct labor $3.75 Variable manufacturing overhead $1.50 Fixed manufacturing overhead $15,000Sales commissions $0.50 Variable administrative expense $0.55 Fixed selling and administrative expense $4,500If the selling price is $20.60 per unit, the contribution margin per unit sold is closest to: (A) $6.00 (B) $10.50 (C) $4.05 (D) $7.95

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  1. 4 May, 12:58
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    The correct answer is D: $7.95

    Explanation:

    Giving the following information:

    Direct materials $6.35

    Direct labor $3.75

    Variable manufacturing overhead $1.50

    Sales commissions $0.50

    Variable administrative expense $0.55

    The selling price is $20.60 per unit.

    Contribution Margin = Selling price - variable costs

    CM = 20.60 - (6.35 + 3.75 + 1.5 + 0.50 + 0.55) = $7.95
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