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8 November, 21:46

Tirri Corporation has provided the following information: Cost per UnitCost per Period Direct materials$7.35 Direct labor$3.55 Variable manufacturing overhead$1.40 Fixed manufacturing overhead $24,100 Sales commissions$1.15 Variable administrative expense$0.70 Fixed selling and administrative expense $8,500 If the selling price is $27.80 per unit, the contribution margin per unit sold is closest to: Multiple Choice $13.65 $6.80 $16.90 $10.60

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  1. 8 November, 22:04
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    The correct answer is A.

    Explanation:

    Giving the following information:

    Direct materials = $7.35

    Direct labor = $3.55

    Variable manufacturing overhead = $1.40

    Sales commissions = $1.15

    Variable administrative expense = $0.70

    The selling price is $27.80

    The contribution margin is the result of deducting from the selling price all the variable cost components.

    Contribution margin = selling price - (direct material + direct labor + variable overhead + sales comission + variable administrative expense)

    Contribution margin = 27.8 - 14.15 = $13.65
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