Question

repps Corporation produces a single product. Last year, Krepps manufactured 25,000 units and sold 20,000 units. Production costs for the year were as follows: Direct materials 180,000 Direct labor 120,000 Variable manufacturing overhead 210,000 Fixed manufacturing overhead 250,000 Sales totaled $850,000 for the year, variable selling and administrative expenses totaled $110,000, and fixed selling and administrative expenses totaled $170,000. There was no beginning inventory. Assume that direct labor is a variable cost. The contribution margin per unit was:

Answer 1

Answer:

unitary contribution margin= $16.6

Explanation:

Giving the following information:

Direct materials 180,000

Direct labor 120,000

Variable manufacturing overhead 210,000

Variable selling and administrative expenses= $110,000

Sales totaled $850,000

First, we need to calculate the unitary production variable cost:

Unitary production variable cost= 510,000/25,000= $20.4

Now, the total unitary variable cost and the selling price:

Total unitary variable cost= (110,000/20,000) + 20.4= $25.9

Selling price= 850,000/20,000= $42.5

Finally, the unitary contribution margin:

unitary contribution margin= 42.5 - 25.9

unitary contribution margin= $16.6