Macy Corporation's relevant range of activity is 5100 units to 11,500 units. When it produces and sells 8300 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 5.00 Direct labor $ 3.45 Variable manufacturing overhead $ 1.45 Fixed manufacturing overhead $ 3.80 Fixed selling expense $ 1.40 Fixed administrative expense $ 0.95 Sales commissions $ 1.35 Variable administrative expense $ 0.85 If the selling price is $27.00 per unit, the contribution margin per unit sold is closest to:

Question

Business

Frankie Maxwell

14 April, 02:45

Macy Corporation's relevant range of activity is 5100 units to 11,500 units. When it produces and sells 8300 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 5.00 Direct labor $ 3.45 Variable manufacturing overhead $ 1.45 Fixed manufacturing overhead $ 3.80 Fixed selling expense $ 1.40 Fixed administrative expense $ 0.95 Sales commissions $ 1.35 Variable administrative expense $ 0.85 If the selling price is $27.00 per unit, the contribution margin per unit sold is closest to:

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Answers (1)

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Marlee Jimenez · Answer 1

Contribution margin per unit = $14.9

Explanation:

Giving the following information:

Variable costs:

Direct materials = $5

Direct labor = $3.45

Variable manufacturing overhead = $1.45

Sales commissions = $1.35

Variable administrative expense = $0.85

Total variable cost = $12.1

The selling price is $27.00 per unit

The contribution margin is the result of deducting from the selling price all the unitary variable costs.

Contribution margin per unit = 27 - 12.1

Contribution margin per unit = $14.9