Direct materials $ 7.20 Direct labor $ 4.50 Variable manufacturing overhead $ 1.25 Fixed manufacturing overhead $ 23,800 Sales commissions $ 1.30 Variable administrative expense $ 0.55 Fixed selling and administrative expense $ 8,200 If the selling price is $27.50 per unit, the contribution margin per unit sold is closest to:

Question

Business

Paige Hurst

28 April, 13:15

Direct materials $ 7.20 Direct labor $ 4.50 Variable manufacturing overhead $ 1.25 Fixed manufacturing overhead $ 23,800 Sales commissions $ 1.30 Variable administrative expense $ 0.55 Fixed selling and administrative expense $ 8,200 If the selling price is $27.50 per unit, the contribution margin per unit sold is closest to:

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Answers (1)

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Natalia Jennings · Answer 1

Unitary contribution margin = $12.7

Explanation:

Giving the following information:

Direct materials $ 7.20

Direct labor $ 4.50

Variable manufacturing overhead $ 1.25

Sales commissions $ 1.30

Variable administrative expense $ 0.55

Selling price is $27.50 per unit

The contribution margin per unit is the deduction of all the unitary variable costs from the selling price.

Total unitary variable cost = 7.2 + 4.5 + 1.25 + 1.3 + 0.55 = $14.8

Unitary contribution margin = 27.5 - 14.8

Unitary contribution margin = $12.7