Ramort Company reports the following cost data for its single product. The compa

Question

Ramort Company reports the following cost data for its single product. The company regularly sells 19,500 units of its product at a price of $59.00 per unit.

  
Compute contribution margin under variable costing.

Direct materials $ 9.90 per unit Direct labor $ 11.90 per unit Overhead costs for the year Variable overhead $ 2.90 per unit Fixed overhead per year $ 36,100 Selling and adminstrative costs for the year Variable $ 1.90 per unit Fixed $ 65,100 Normal production level (in units) 19,500 units

Explanation / Answer

Compute contribution margin under variable costing :

Sales 1150500 Less: Variable cost Direct material (19500*9.9) 193050 Direct labour (19500*11.9) 232050 Variable overhead (19500*2.9) 56550 Variable selling and administrative (19500*1.9) 37050 Total variable cost 518700 Contribution margin 631800

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