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22 May, 22:05

Macy Corporation's relevant range of activity is 5100 units to 11,500 units. When it produces and sells 8300 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 5.00 Direct labor $ 3.45 Variable manufacturing overhead $ 1.45 Fixed manufacturing overhead $ 3.80 Fixed selling expense $ 1.40 Fixed administrative expense $ 0.95 Sales commissions $ 1.35 Variable administrative expense $ 0.85 If the selling price is $27.00 per unit, the contribution margin per unit sold is closest to:

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  1. 22 May, 22:20
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    Contribution margin per unit = $14.9

    Explanation:

    Giving the following information:

    Variable costs:

    Direct materials = $5

    Direct labor = $3.45

    Variable manufacturing overhead = $1.45

    Sales commissions = $1.35

    Variable administrative expense = $0.85

    Total variable cost = $12.1

    The selling price is $27.00 per unit

    The contribution margin is the result of deducting from the selling price all the unitary variable costs.

    Contribution margin per unit = 27 - 12.1

    Contribution margin per unit = $14.9
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