Question

Wessner Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 6.20 Direct labor $ 2.80 Variable manufacturing overhead $ 1.45 Fixed manufacturing overhead $ 12,000 Sales commissions $ 1.00 Variable administrative expense $ 0.55 Fixed selling and administrative expense $ 4,000 If the selling price is $25.00 per unit, the contribution margin per unit sold is closest to: a. $9.00 b. $16.00 c. $11.55 d. $13.00

Answer 1

Answer:

d. $13.00

Explanation:

contributon margin = selling price - variable cost

sales price: $25 per unit

list of variable cost:

Direct mateirals              6.20

Direct labor                     2.80

variable overhead           1.45

sales commisions            1.00

adminsitrative variable   0.55  

total variable cost         12.00

$25 selling price per unit - $12 variable cost per unit =

$13 contribution margin per unit

This is the amount each units "contributes" to ay the fixed cost and make a gain during the period.