Question

Tirri Corporation has provided the following information: Cost per UnitCost per PeriodDirect materials$ 7.05 Direct labor$ 4.20 Variable manufacturing overhead$ 1.55 Fixed manufacturing overhead $ 23,500Sales commissions$ 1.15 Variable administrative expense$ 0.40 Fixed selling and administrative expense $ 7,900 If the selling price is $27.20 per unit, the contribution margin per unit sold is closest to:

Answer 1

Answer:

Contribution margin per unit= $12.85

Explanation:

Giving the following information:

Direct materials$ 7.05

Direct labor$ 4.20

Variable manufacturing overhead$ 1.55

Sales commissions $ 1.15

Variable administrative expense$ 0.40

To calculate the contribution margin, we need to use the following formula:

Contribution margin per unit= selling price - total unitary variable cost

Contribution margin per unit= 27.2 - (7.05 + 4.2 + 1.55 + 1.15 + 0.4)

Contribution margin per unit= $12.85