Question

Tirri Corporation has provided the following information: Cost per UnitCost per Period Direct materials$7.35 Direct labor$3.55 Variable manufacturing overhead$1.40 Fixed manufacturing overhead $24,100 Sales commissions$1.15 Variable administrative expense$0.70 Fixed selling and administrative expense $8,500 If the selling price is $27.80 per unit, the contribution margin per unit sold is closest to: Multiple Choice $13.65 $6.80 $16.90 $10.60

Answer 1

Answer:

The correct answer is A.

Explanation:

Giving the following information:

Direct materials= $7.35

Direct labor= $3.55

Variable manufacturing overhead= $1.40

Sales commissions= $1.15

Variable administrative expense= $0.70

The selling price is $27.80

The contribution margin is the result of deducting from the selling price all the variable cost components.

Contribution margin= selling price - (direct material + direct labor + variable overhead + sales comission + variable administrative expense)

Contribution margin= 27.8 - 14.15= $13.65