Question

Tirri Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 7.40 Direct labor $ 3.65 Variable manufacturing overhead $ 1.45 Fixed manufacturing overhead $ 24,200 Sales commissions $ 1.20 Variable administrative expense $ 0.75 Fixed selling and administrative expense $ 8,600 If the selling price is $27.90 per unit, the contribution margin per unit sold is closest to:

Answer 1

Answer:

$13.45

Explanation:

The computation of contribution margin per unit sold is shown below:-

Contribution margin per unit = Selling price - (Direct materials + Direct labor + Variable manufacturing overhead + Sales commissions + Variable administrative expense)

= $27.90 - ($7.40 + $3.65 + $1.45 + $1.20 + $0.75)

= $27.90 - $14.45

= $13.45

Therefore for computing the contribution margin per unit sold we simply applied the above formula.