Answer:
Princeton Fabrication, Inc.
1. Variable Manufacturing cost per unit:
$66
2. Full Manufacturing cost per unit:
= $77
3. Variable cost per unit:
$71
4. Full absorption cost per unit:
$100
5. Prime Cost per unit:
$42
6. Conversion Cost per unit:
$69
7. Profit margin per unit:
$37
8. Contribution Margin per unit:
$71
9. Gross margin per unit:
$60
Explanation:
a) Data and Calculations:
Quantity produced and sold in March = 1,400
Sales price (per unit) $137
Manufacturing costs:
Fixed overhead (for the month) 15,400
Direct labor (per unit) 8
Direct materials (per unit) 34
Variable overhead (per unit) 24
Marketing and administrative costs:
Fixed costs (for the month) 25,200
Variable costs (per unit) 5
b) Variable Manufacturing cost per unit:
Direct labor (per unit) 8
Direct materials (per unit) 34
Variable overhead (per unit) 24
Total variable cost per unit $66
c) Full Manufacturing cost per unit:
Variable cost ($66 x 1,400) = $92,400
Fixed overhead (for the month) 15,400
Total manufacturing cost = $107,800
$107,800/ 1,400 = $77
d) Variable cost per unit:
Direct labor (per unit) 8
Direct materials (per unit) 34
Variable overhead (per unit) 24
Variable costs (per unit) 5
Total variable costs per unit $71
e) Full absorption cost per unit:
Total variable costs ($71 * 1,400) = $99,400
Total fixed costs: manufacturing 15,400
Total fixed marketing & admin 25,200
Total absorption costs = $140,000
unit absorption cost = $140,000/1,400 = $100
f) Prime Cost per unit:
Direct labor (per unit) 8
Direct materials (per unit) 34
Prime cost per unit $42
g) Conversion Cost per unit:
Direct materials (per unit) 34
Overhead cost per unit 35 (fixed overhead + variable overhead) per Conversion cost per unit = $69
h) Profit margin per unit:
Selling price $137
Full cost 100
Profit margin $37
i) Contribution Margin per unit:
Selling price $137
Variable manufacturing cost $66
Contribution margin per unit $71
j) Gross margin per unit:
Selling price $137
Manufacturing cost 77
Gross margin $60
