Hyper Color Company manufactures widgets. The following data is related to sales

Question

Hyper Color Company manufactures widgets. The following data is related to sales and production of the widgets for last year. Selling price per unit Variable manufacturing costs per unit Variable selling and administrative expenses per unit Fixed manufacturing overhead (in total) Fixed selling and administrative expenses (in total) Units produced during the year Units sold during year $63 $9 $30,000 $8,000 2,000 1,000 Using variable costing, what is the contribution margin for last year? O A. $88,000 OB. $160,000 OC. $63,000 O D. $232,000 Click to select your answer.

Explanation / Answer

Select ----------- Option - A .......... 88000

Units sold during the year = 1000

Selling price = 160

Variable cost per Unit = Variable manufacturing + Variable selling = 63 + 9 = 72

Contribution margin per Unit = Selling Price - variable cost = 160 - 72 = 88

So ......... Total contribution margin = 1000 Units sold * 88 per unit = 88000

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