Answer:
Contribution margin per unit= $33
Explanation:
Giving the following information:
The company regularly sells 20,000 units of its product for <u>$60 per unit. </u>
<u>Direct materials $ 10 per unit </u>
<u>Direct labor $ 12 per unit</u>
<u>Overhead costs for the year Variable overhead $ 3 per unit </u>
Fixed overhead per year $ 40,000
Selling and administrative costs:
<u>Variable $ 2 per unit </u>
Fixed $ 65,200
Normal production level= 20,000 units
Contribution margin= Selling price - unitary variable costs
Unitary variable cost= direct materials + direct labor + variable manufacturing overhead + variable selling and administrative
Unitary variable cost= 10 + 12 + 3 + 2= $27
Contribution margin per unit= 60 - 27= $33
