Paney Company makes calendars. Information on cost per unit is as follows: Direc

Question

Paney Company makes calendars. Information on cost per unit is as follows:

Direct materials

$1.50

Direct labor

1.20

Variable overhead

0.90

Variable marketing expense

0.40

Fixed marketing expense totaled $13,000 and fixed administrative expense totaled $35,000. The price per calendar is $10.What is the contribution margin per unit?

17. Total variable cost divided by price is A)contribution ratio
B)degree of operating leverage
C)sales ratio
D)revenue ratio
E)variable cost ratio
18. Contribution margin ratio can be calculated in all of the following ways except A)all of these are correct
B)Contribution margin per unit/price
C)Fixed costs/Contribution margin per unit
D)1 - Variable cost ratio
E)Total contribution margin/Total sales
19.

Paney Company makes calendars. Information on cost per unit is as follows:

Direct materials

$1.50

Direct labor

1.20

Variable overhead

0.90

Variable marketing expense

0.40

Fixed marketing expense totaled $13,000 and fixed administrative expense totaled $35,000. The price per calendar is $10.What is the contribution margin per unit?

A)$5.40
B)$6.30
C)$6.00
D)$5.00
E)$6.40
20. If the contribution margin ratio increases A)more units must be sold to break even.
B)price must have decreased.
C)the variable cost ratio decreases.
D)fixed costs must have decreased.
E)the break-even point increases.

Explanation / Answer

c d b c

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