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Fantom [35]
2 years ago
13

ACME Inc. manufactures components. One of its products, which is used in the construction of consumer products, is known as XsR.

Data concerning this product are given below: Per Unit Selling price $ 220 Direct materials $ 38 Direct labor $ 1 Variable manufacturing overhead $ 8 Fixed manufacturing overhead $ 16 Variable selling expense $ 4 Fixed selling and administrative expense $ 16 The above per unit data are based on annual production of 4,000 units of the component. Assume that direct labor is a variable cost. What is the current contribution margin per unit for component XsR based on its selling price of $220 and its annual production of 4,000 units
Business
1 answer:
Alex17521 [72]2 years ago
5 0

Answer:

Contribution margin per units= $169

Explanation:

Giving the following information:

Selling price $ 220

Direct materials $38

Direct labor $ 1

Variable manufacturing overhead $8

Variable selling expense $ 4

<u>The contribution margin per unit is calculated deducting from the selling price all the variable components:</u>

Total unitary variable cost= $51

Contribution margin per units= 220 - 51

Contribution margin per units= $169

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